Regardless of how tax options are packaged and explained, central to the comprehensive review of the tax system is the burning issue of whether more people should pay tax. The Government's answer has been a clear 'yes'.
But at times of economic gloom and lay-off fears, any proposals for existing taxpayers to pay more or to pull more people into the tax net are non-starters. Any hasty moves by the Government to levy new taxes, albeit insignificant ones, when the economy has yet to recover fully will be criticised as insensitive to the plight of the community.
Furthermore, any new taxes are bound to stir up conflicts between sectoral interests. Not surprisingly, champions for grass-roots and low-income interests have already opposed the ideas of a sales tax and land departure levy. Businesses fear a new consumption-based tax will aggravate sluggish consumption levels.
Worse still, the Government has yet to come up with a convincing case about the problem of structural deficits. Although the Government may argue that it will not be able to entertain raised expectations for better services on current revenue, many people will target the Government for its failure to control expenditure.
Yesterday, the newspaper Wen Wei Po, which has supported most of Tung Chee-hwa's policies, said the Government had a headache in footing a heavy payroll for its civil servants, citing the recent pay rise.
The call for the administration to reduce costs for public services has been shared by people from different sectors. It will certainly be raised again in the tax debate. This is because the public remains deeply aggrieved that the SAR's leaders have failed to impress the community they are committed to helping in difficult times.
