Financial Secretary Henry Tang Ying-yen yesterday gave his strongest hint yet that the government will give tax concessions when he announces his budget next Wednesday.
His remarks came as lawmakers passed a motion calling for salaries tax rates and allowances to be returned to their 2002-03 level, while warning against cutting welfare spending.
In an interview with Cable TV, Mr Tang said he understood the financial burden the middle class had been shouldering and acknowledged the public's demand for tax relief. He said a one-off tax rebate would only give a short-term stimulus to consumer spending.
'The concept of cutting tax stems from the concept of allowing the people to keep their wealth,' he said.
If the government could balance the interests of all sides and still maintain its programme, this was 'a viable principle in theory'.
The Democratic Party's Sin Chung-kai, who moved the motion in the Legislative Council, said a tax cut would help stimulate spending and create jobs.
Liberal Party chairman James Tien Pei-chun said the salaries tax should return to the 2002-2003 level, when the basic and married person's allowances were $108,000 and $216,000 respectively, and the standard rate of tax was 15 per cent. Those allowances are currently $100,000 and $200,000 respectively, and the standard tax rate 17 per cent.