Hong Kong is facing a crisis - how to fund an increasing budget deficit at a time of almost unprecedented economic downturn.
| Shenzhen: might lure more shoppers if Hong Kong levies a sales tax |
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Unemployment, already high, is predicted to reach new records, economic growth forecasts are falling by the month, and none of the magic bullets that served in the past, such as windfalls from high land prices or exports of manufactures, is in the portfolio of measures available to solve the problem.
Now a high-powered government committee has caused controversy by proposing that it is time to consider new taxes. In particular, it suggests a 3% sales or consumption tax. For good measure the committee - the advisory committee on new broad-based taxes - adds several other taxation measures that might be considered.