City has never been a tax haven, EU told

Hong Kong's financial services chief has stressed to the European Union that the city has never been a tax haven, following concerns raised at a global leaders' summit last month.

Chan Ka-keung, secretary for financial services and the treasury, said he had explained to Laszlo Kovacs, the EU commissioner for taxation and customs, the government's intention to move an amendment to taxation laws to make it easier to share information with other tax jurisdictions.

Concerns were raised at the Group of 20 summit in London last month about the lack of a law in Hong Kong allowing the sharing of tax information.

Professor Chan said the commissioner had welcomed the government's move.

The bill would hopefully be passed by the Legislative Council before its summer recess, Professor Chan said.

He also said Hong Kong had won praise for the robustness of its financial system, and in particular its 70 per cent ceiling for home loans, which had reduced banks' exposure to risk in the economic downturn.

Professor Chan made the remarks as he concluded a four-day trip to Brussels and London, during which he met Belgium's deputy prime minister and finance minister, Didier Reynders, and leading executives from London's stock exchange and the British Bankers' Association.

The minister said that while investors in Hong Kong's stock markets were showing confidence, it was too early to say there would not be adversity in the future.

Output would shrink this year and consumers would spend less, Professor Chan said.