Preserving Revenue Base

149.    Government has been committed to modernising the tax legislation in recent years to ensure that Hong Kong maintains a fair tax environment, aligns our tax system with international standards, and enhances our competitiveness.

150.    Government just introduced a bill into LegCo this January on the implementation of the international standard on Automatic Exchange of Financial Account Information in Tax Matters.  I look forward to early completion of the legislative process to bring the first automatic exchange into effect in 2018 as pledged.

151.    Hong Kong is also obliged to implement the project of the Group of Twenty against base erosion and profit shifting.  We shall conduct analysis, consult the trade and consider participating in an international framework being developed by the Organisation for Economic Co-operation and Development.

152.    Over the past three years, we have made strenuous efforts to remind all government departments to regularly review their fees and charges.  Unless justified on policy ground, all fees and charges for government services have been set in accordance with the "cost-recovery" and "user pays" principles.  The review mechanism has been re-activated in most of the departments.  Relevant fees and charges have registered an average annual increase of $400 million in the three years since 2012-13.