Having dropped the sales tax due to lack of public support, the Hong Kong government has sustained its campaign for broadening the tax base, which it considers to be too narrow and confined to provide for the projected fiscal expenditure of a modern metropolis.

Financial Secretary Henry Tang is quoted as saying, in an interim report on the nine-month consultation on the now abandoned sales tax proposal, that the public generally understood the problem of a narrow tax base.

"At present, we do not have a second-best option. (But) what we know is that the public do think there is a need to continue the discussion," Tang said. The discussion is based on the 2002 report by the government-appointed Advisory Committee on New Broad-based Taxes, which lists 14 options.

One of the options that seems to have gained increasing support from law makers and civic leaders is the introduction of an environment-related "green" tax. This appears to be the most sensible choice because Hongkongers can be counted on to chip in for the improvement of the environment, which has been a major concern not only to environmentalists but also to the general public.

Much has been written about the health hazards posed by the deteriorating air quality in Hong Kong. Although the magnitude of this threat is open to debate, many people have come to believe that it is real indeed.

Plastic bags and a wide range of nasty packaging materials have long been regarded as an environmental nuisance that has spoiled our otherwise idyllic country parks and pristine beaches.

Some of the environment's worst enemies are of course the property developers who levelled green hills and chopped down graceful banyan trees to make way for the building of the many nondescript tenement blocks that are a disgrace to Hong Kong's skyline.

Caterers in Hong Kong have come to accept the extra levy for cleaning up their waste. But there are too many businesses and individuals who continue to get off scot-free for polluting our city and destroying our environment. They are robbing us of our most precious heritage and have been getting away with it for too long.

Bernard Chan, an executive councillor and legislator, is quoted by the local press as saying that the political parties in Hong Kong support a green tax, though "I would not underestimate the difficulties of introducing one."

At issue is the scope of the tax. Some politicians have recommended limiting the tax to energy usage. But the projected revenue from such a tax, estimated at a few hundred million Hong Kong dollars a year, is too small to make any meaningful difference to the multi-billion dollar annual budget. In contrast, a sales tax could generate an estimated HK$20 billion (US$2.6 billion) in net income for the government each year.

If the green tax option is indeed chosen, the government should have the resolve to propose one that encompasses not only the energy sector, but a wide range of commercial activities that pose a real threat to the environment.

Take the case of plastic bags. Shops and supermarkets wrap almost everything in plastic. I once bought a bar of chocolate at a convenience store and it was handed to me in a large plastic bag at the counter after I paid.

Unsurprisingly, discarded plastic bags are everywhere, clogging our drains and littering our parks and beaches. You can see them floating on the water when you cross the harbour on a ferry. On a windy day, you can see plastic bags flying in the air, some attaching themselves to lamp posts and shop signs. It's not a pretty sight.

Environmentalists and some civic leaders have called for a levy on plastic bags to curb their use. That sounds like a jolly good idea.

Hong Kong's tax on petrol is widely considered to be pretty high compared with most Southeast Asian countries. But there is obvious room for further increases as the number of cars, especially petrol-guzzling luxury sedans, continues to rise.

Few families in Hong Kong really need private cars because of the excellent public transport system. In fact, most people who own cars don't use them except for leisure. Finding a parking space in the busy commercial district is a real chore at almost any time of the day.

Raising the petrol tax is not going to drive private cars off the roads. People in Hong Kong who can afford to own cars should be able to afford higher petrol prices. They can continue to enjoy their BMWs and Mercedes. A few hundred dollars in extra expenses a year are not going to make them dump their wheels.

The report proposes various other options, including dividend tax and interest withholding tax, both of which were removed long ago to promote the development of the financial services sector. The re-introduction of such taxes at this time is simply unthinkable.

Let's just stick to the green tax in our public discussion. It's the most sensible choice.

(China Daily 12/19/2006 page4)