Just as the GST debate in Singapore seems to be petering out, Hong Kong — the very economy that Singapore is often trying to emulate — yesterday shelved its plans to introduce a 5 per cent GST in the face of strong public opposition. It is notable that this decision was reached after a long 9 month public consultation. In Singapore’s case, there was no public consultation at all. Just an announcement in Parliament which Singaporeans are expected to meekly accept. Perhaps it is not just the government that is to be faulted, but us citizens as well for too easily accepting whatever will be, will be.
Hong Kong shelves controversial sales tax plan
HONG KONG (AFP) – Hong Kong is to drop plans to introduce a goods and services tax (GST) after it failed to win enough public support for a change in the city’s famously low tax environment.
Financial Secretary Henry Tang said the decision was reached after an ongoing public consultation showed that the controversial plan lacked public support.
“It is clear from the views collected that we have not been able to convince the majority to accept GST as the main option to address the tax base problem,” he said.
“So we accepted that at this time we do not have the public support nor the conditions for introducing a GST. For the remainder part of the consultation we will not be advocating GST as the only option,” he told reporters.
Tang did not take questions nor clarify whether the government will re-consider the policy in the future.
He said the government will stop promoting the plan over the remainder of the nine-month consultation period and urged citizens to continue to provide their views on the other possible ways to widen the tax base.
Hong Kong leader Donald Tsang said the decision has complete support from him and the Executive Council, or cabinet.
“We believe that the decision (Tang) has made respects fully the wishes of Hong Kong people that we should seriously consider widening our tax base,” he said.
“At the same time he has paid full regard to the strong opposition of the people to the introduction of GST at this time,” he said.
Tsang Yok-sing, Executive Councillor and the founding chairman of the pro-Beijing Democratic Alliance for the Betterment of Hong Kong (DAB), also welcomed the move.
“We opposed the GST but also believe that we should find other ways to widen the tax base … we welcome that the government has listened to the public views,” he said.
The proposal has met public hostility with protests denouncing the plan throughout the consultation period. All major political parties opposed the measure.
Activists had accused Tang of robbing the poor to pay the rich, with protesters saying a sales tax would decimate the booming tourism industry by making shopping in Hong Kong — one of its biggest draws — less attractive.