Financial Secretary Henry Tang Ying-yen said yesterday a salaries tax cut could be introduced as compensation for any new tax on goods and services. Saying he would provide further details in his budget next week, Mr Tang stressed the government had no established position on the matter and that it would take at least three years to decide whether such measures should be introduced. 'How high the level of a [sales tax] would be would depend on what sort of compensation or exemptions will be introduced in the future. In general, many people say that when a new tax is introduced there should be tax cuts as compensation,' he said in an interview with Cable TV. 'This is a zero-sum game and when there is more here, then there should be less there.' The government has long considered introducing a sales tax to widen its tax base but baulked at concerns that such a move would hurt the underprivileged. Mr Tang said the present tax system gave unstable revenue returns, especially when the economy fluctuated. There was, therefore, a need to widen the tax base. '[Instability] is unhealthy in terms of public finances. If we widen the tax base and make revenue more stable, we can have more reliable planning for our expenditure.' Mr Tang's spokesman later said the government had no position on whether there would be a cut in salaries tax if a sales tax was introduced, saying only that this was a view widely expressed in society. Political parties reacted cautiously to Mr Tang's comments. Democrat Sin Chung-kai said the economy was improving and the government should not fear a lack of revenue. 'What's the point in raising such a sales tax when the government is flooded with cash? The only reason he is talking about a tax cut is because he doesn't want to give a cut in salaries tax now.' Chan Kam-lam, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said the government should not be rushed into a decision.