The top 500,000 payers now account for nearly 95 per cent of revenue The middle class has increasingly born the burden of taxation over the past several years, Financial Secretary Henry Tang Ying-yen said yesterday. The top 500,000 income-tax payers now accounted for 94.5 per cent of revenue, compared with 90.3 per cent in 1997-98, Mr Tang said. Meanwhile, the lowest 300,000 income-tax payers this year accounted for only 1.6 per cent of revenue, a fall from 3.6 per cent in 1997-98. Mr Tang said he agreed that those who enjoyed high salaries should pay more tax, but added: 'The question is where to draw the line.' He remained non-committal about moves aimed at reducing income tax, saying there were different ways to ease the burden on the middle class, such as through adjustments in the duties on petrol and alcohol. Mr Tang made his remarks while addressing the Legco financial affairs panel as part of consultations over the budget. Democratic Party legislator Sin Chung-kai called for tax concessions to be introduced after a second-stage increase in income tax comes into effect later this year. 'It was a heavy dosage by the former financial secretary. I wonder if there is any room to ease the burden on the middle class in the coming budget?' said Mr Sin, the party's spokesman on the economy. The Democratic Party is initiating a joint campaign in Legco in an attempt to press the government into scrapping the second-stage increase, which is projected to raise $6 billion. Frontier legislator Emily Lau Wai-hing said she hoped the next budget would include measures to address the growing gap between rich and poor. Mr Tang said the problems of the underprivileged and low-income earners would be highlighted in the policy address in January, as well as the next budget. He said the 'polarisation' of income was a global problem and the government would continue to invest in education. 'We have to accept that people with low skills and education cannot handle certain jobs in a knowledge-based economy,' he said. Mr Tang rejected claims that the government was not doing enough to strengthen the welfare system, saying spending in this area had surged 236 per cent to $33.7 billion over the past decade. The finance secretary said he remained cautiously optimistic that the budget deficit would be wiped out in 2008-09, as previously pledged. However, he said the effects on the local economy of global oil prices, rising interest rates in the United States and macroeconomic adjustments on the mainland remained uncertain.