More than half the people of Hong Kong and some professional groups want the government to cut salary tax in the annual budget, to be declared on February 22.

A survey conducted by the Democratic Alliance for Betterment and Progress of Hong Kong (DAB) at the end of January showed 57 per cent of the 1,400 respondents were in favour of reducing salary tax to the 2002-03 levels.

The cut would increase the basic allowance from HK$100,000 to HK$108,000 and married person's allowance from HK$200,000 to HK$216,000. The tax allowances were lowered, in two phases, to the 1997-98 levels in March 2003 by former Financial Secretary Antony Leung, facing an estimated HK$70 billion budget deficit, to bolster government income.

The survey also shows 53 per cent people want a bigger child allowance, which was raised to HK$40,000 from HK$30,000 in 2004-05.

Most of the lower-income families interviewed hoped the government would use the widely expected budget surplus to improve social welfare services and people's livelihoods. Higher-income families, on the other hand, looked forward to tax rebates or reductions.

DAB suggested that tax bands and the standard rate be returned to the 2002-03 levels, and dependent parent and grandparent allowances and home loan interest deduction amount (HLIDA) be lifted to meet people's expectations.

Professional organizations and a middle-class pressure group in City Forum, organized by Radio Television Hong Kong (RTHK), yesterday were in conformity with the survey findings.

At the forum, Hong Kong Institute of Certified Public Accountants President Paul Chan proposed that Financial Secretary Henry Tang reduce salary tax, raise HLIDA from HK$100,000 to HK$130,000 and extend the allowed number of years for deduction from 7 to 15. Taxation Institute of Hong Kong Vice-president Bernard Wu, too, supported mild cuts in salary tax.

Voice of Middle Class Chairman Lee Tze-wing suggested that child allowance be increased from HK$40,000 to HK$60,000.

On RTHK's programme "A Letter to Hong Kong", Liberal Party Chairman James Tien suggested lowering salary tax rates and raising HLIDA under a favourable situation.

Source: China Daily