Financial Secretary Antony Leung Kam-chung is expected to raise more than $20 billion in extra revenue with a package of increased taxes and government fees to be announced in his Budget speech tomorrow. Lowering allowances for salaries tax and increasing the rate of profits tax are set to bring in almost half this amount, as the government seeks to tackle a fiscal deficit expected to hit $70 billion. The speech has undergone much fine tuning. The final Chinese language version is the 12th draft. Plans to increase revenue form a key part of a strategy to balance the books by 2006-07. Officials are pinning their hopes on an economic recovery. Slashing public expenditure by $20 billion within three years is also on the agenda. Business groups have lent their weight to a profit tax increase of 1 percentage point. But there are suggestions the level may rise as much as 2 percentage points, prompting Executive Councillor James Tien Pei-chun to comment that such an increase would damage Hong Kong's international image. A 1 percentage point rise will draw in extra income of about $2.6 billion a year. As for salaries tax, Chief Executive Tung Chee-hwa has indicated that personal allowances will be restored to the level they were before concessions were granted in the 1998 budget. This would mean lowering the personal allowance for a single person from $108,000 to $100,000. The concessions, which included widening the tax bands from $30,000 to $35,000, cost the government $8 billion that year. Extra revenue will come from the introduction of other taxes and the removal of concessions on government fees and charges. These include $1 billion to be raised from the land departure tax and $1 billion from legalised soccer betting. Democrat Sin Chung-kai said the extra revenue may well be about $20 billion if concessions were scrapped. 'However, it will need to get the endorsement of the legislature. We would vote down the reduction of personal allowances for salaries tax,' he added. Mr Sin warned the government to be careful because even parties that normally supported it needed to take care of voters.