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SCMP Reporter

People crossing the border frequently will get a 50 per cent discount on the proposed departure tax under the planned boundary facilities improvement fee.

A tax of $100 each would be imposed on private vehicles - which are not taxed at present - while $18 would be charged per traveller crossing the border from Hong Kong. Based on the cross-border traffic volume, the scheme could raise $1 billion a year.

'The tax at a reasonable rate will help finance the improvement of boundary facilities and mitigate the fiscal deficit,' the Treasury Bureau and the Financial Services Branch told legislators yesterday.

More than $14 billion has been ploughed into projects including the Lok Ma Chau Spur Line to improve cross-border facilities.

The plan was floated in March 1999 by former financial secretary Donald Tsang Yam-kuen, who is now Chief Secretary. In last year's Budget, financial chief Antony Leung Kam-chung said that the tax would be introduced in 2003-04.

Under the plan, people crossing the border by land or sea will be charged $18 each per trip - the same amount currently imposed on individuals departing by sea.

The tax will be included in the fares to avoid disrupting passenger flow. A total of 149 transport operators will collect the tax on behalf of the government.

Based on 30 trips or a month of daily crossings into the mainland, passengers will be entitled to a $270, or 50 per cent, discount, which will be reflected in the price of a monthly ticket.

The concessionary tax does not apply to cruise ships, including floating casinos.

Private motorists will also be exempted but must pay $100 for each vehicle, using the toll system.

Currently, only passengers departing Hong Kong by air and by sea are required to pay either a tax or a fixed fee to the government.

In its submission to legislators, the Treasury Bureau also proposed certain exemptions.

Among these are full-time students who reside in Hong Kong, Macau or Guangdong but who cross the border regularly to attend their classes. These include students receiving primary, secondary, post-secondary and tertiary education or any technical and vocational training courses.

Other exempted groups include children under the age of 12, drivers, crew members operating vehicles, ferries or cruise ships, transit passengers, diplomats and members of consular bodies and specified international organisations.

People who failed to pay the tax would be fined or imprisoned for six to 12 months. A surcharge of 5 per cent would be imposed on delayed payments and 10 per cent if payments were delayed by more than six months.

Democrat legislator Andrew Cheng Kar-foo said exemptions should be granted to more people.

'The concession granted does not go far enough. The elderly, not just the children, and those who need to cross the border to work every day should be exempted as well,' he said.

'As to the charge on the private vehicles, each passenger should be charged $18 plus a lower charge on the vehicle. That will be fairer.'

Liberal Party legislator Miriam Lau Kin-yee, who represents the transport sector, said clarification was needed if trucks would be taxed while their drivers are exempted.

She said the tax rate of $18 per individual would be acceptable but the $100 charge on private vehicles was a bit high.

According to government statistics for 2002, more than 58 million passengers crossed the border from Hong Kong while six million vehicles departed through the five boundary checkpoints at Lowu, Lok Ma Chau, Man Kam To, Sha Tau Kok and Hunghom.

WHAT YOU MAY PAY

People crossing the border from Hong Kong by land or sea will be charged $18 per trip

Drivers will pay $100 per car

Frequent travellers will get a 50pc concessionary rate

The border tax could raise $1 billion a year



50pc border travel discount proposed