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DRAFT 立法會 Legislative Council LC Paper No. FC165/20-21 (These minutes have been seen by the Administration) Ref : FC/1/1(4) Finance Committee of the Legislative Council Minutes of the 4th meeting held at Conference Room 1 of the Legislative Council Complex on Friday, 13 November 2020, from 2:54 pm to 6:43 pm Members present: Hon CHAN Kin-por, GBS, JP (Chairman) Hon CHAN Chun-ying, JP (Deputy Chairman) Hon Abraham SHEK Lai-him, GBS, JP Hon Tommy CHEUNG Yu-yan, GBS, JP Hon Jeffrey LAM Kin-fung, GBS, JP Hon WONG Ting-kwong, GBS, JP Hon Starry LEE Wai-king, SBS, JP Hon CHAN Hak-kan, BBS, JP Dr Hon Priscilla LEUNG Mei-fun, SBS, JP Hon WONG Kwok-kin, SBS, JP Hon Mrs Regina IP LAU Suk-yee, GBS, JP Hon Paul TSE Wai-chun, JP Hon Michael TIEN Puk-sun, BBS, JP Hon Steven HO Chun-yin, BBS Hon Frankie YICK Chi-ming, SBS, JP Hon YIU Si-wing, BBS Hon MA Fung-kwok, GBS, JP Hon CHAN Han-pan, BBS, JP Hon LEUNG Che-cheung, SBS, MH, JP Hon Alice MAK Mei-kuen, BBS, JP Hon KWOK Wai-keung, JP Hon Christopher CHEUNG Wah-fung, SBS, JP Hon Elizabeth QUAT, BBS, JP Hon Martin LIAO Cheung-kong, GBS, JP Hon POON Siu-ping, BBS, MH - 2 - Dr Hon CHIANG Lai-wan, SBS, JP Ir Dr Hon LO Wai-kwok, SBS, MH, JP Hon CHUNG Kwok-pan Hon Jimmy NG Wing-ka, BBS, JP Dr Hon Junius HO Kwan-yiu, JP Hon Holden CHOW Ho-ding Hon SHIU Ka-fai, JP Hon Wilson OR Chong-shing, MH Hon YUNG Hoi-yan, JP Dr Hon Pierre CHAN Hon CHEUNG Kwok-kwan, JP Hon LUK Chung-hung, JP Hon LAU Kwok-fan, MH Hon Kenneth LAU Ip-keung, BBS, MH, JP Dr Hon CHENG Chung-tai Hon Vincent CHENG Wing-shun, MH, JP Members absent: Hon James TO Kun-sun Hon LEUNG Yiu-chung Prof Hon Joseph LEE Kok-long, SBS, JP Hon WU Chi-wai, MH Hon Charles Peter MOK, JP Dr Hon Fernando CHEUNG Chiu-hung Dr Hon Helena WONG Pik-wan Hon IP Kin-yuen Hon Andrew WAN Siu-kin Hon LAM Cheuk-ting Hon SHIU Ka-chun Hon KWONG Chun-yu Hon Jeremy TAM Man-ho Hon Tony TSE Wai-chuen, BBS, JP Public officers attending: Ms Alice LAU Yim, JP Permanent Secretary for Financial Services and the Treasury (Treasury) Mr Raistlin LAU Chun, JP Deputy Secretary for Financial Services and the Treasury (Treasury)1 Miss CHAN Cheuk Yin, Jennie Principal Executive Officer (General), Financial Services and the Treasury Bureau (The Treasury Branch) - 3 - Mr Joseph CHAN Ho-lim, JP Under Secretary for Financial Services and the Treasury Mr Maurice LOO Kam-wah, JP Deputy Secretary for Financial Services and the Treasury (Treasury) 2 Ms Jessie WONG Hok-ling, JP Co-ordinator (Special Duties), Financial Secretary's Office Mr Bobby CHENG Kam-wing, JP Deputy Director of Administration 1, Chief Secretary for Administration's Office Mr Clement LEUNG Cheuk-man, Permanent Secretary for Commerce and JP Economic Development (Communications and Creative Industries) Miss Grace KWOK Wing-see Deputy Secretary for Commerce and Economic Development (Communications and Creative Industries) (Special Services) Mr Tony YIP Ka-sing Principal Assistant Secretary for Commerce and Economic Development (Communications and Creative Industries)(Special Services) Mr Erick TSANG Kwok-wai, Secretary for Constitutional and Mainland IDSM, JP Affairs Mr Tommy YUEN Man-chung, Director (Special Duties), Constitutional JP and Mainland Affairs Bureau Mr Benjamin MOK Kwan-yu Deputy Secretary for Constitutional and Mainland Affairs (3) Ms Queenie WONG Ting-chi Principal Assistant Secretary for Constitutional and Mainland Affairs (6) Clerk in attendance: Ms Anita SIT Assistant Secretary General 1 Staff in attendance: Ms Angel SHEK Chief Council Secretary (1)1 Miss Bowie LAM Council Secretary (1)1 Miss Queenie LAM Senior Legislative Assistant (1)2 Mr Frankie WOO Senior Legislative Assistant (1)3 Miss Mandy POON Legislative Assistant (1)1 Miss Yannes HO Legislative Assistant (1)7 ____________________________________________________________ Action 1. The meeting was suspended at 2:54 pm and resumed at 3:15 pm. Action - 4 - 2. The Chairman reminded members of the requirements under Rule 83A and Rule 84 of the Rules of Procedure. Item 1 ― FCR(2020-21)63 RECOMMENDATION OF THE ESTABLISHMENT SUBCOMMITTEE MADE ON 24 JUNE 2019 EC(2019-20)10 HEAD 142 ― GOVERNMENT SECRETARIAT : OFFICES OF THE CHIEF SECRETARY FOR ADMINISTRATION AND THE FINANCIAL SECRETARY Subhead 000 Operational Expenses Continuation of the discussion on item FCR(2020-21)63 3. The Finance Committee ("FC") continued with the discussion on FCR(2020-21)63. 4. The Chairman advised that this item sought the approval of FC for the recommendation of the Establishment Subcommittee ("ESC") made at its meeting on 24 June 2019 regarding EC(2019-20)10, i.e. the creation of one permanent post of Administrative Officer Staff Grade B1 (D4) or one D4-equivalent non-civil service position in the Financial Secretary's Office ("FSO") to strengthen its directorate support for assisting the Financial Secretary ("FS") in the formulation and follow-up of Budget-related proposals as well as spearheading strategic tax policies and measures in Hong Kong. ESC had spent approximately 1 hour and 38 minutes in total on the scrutiny of the aforesaid proposal. FC had also spent about 3 hours 30 minutes on discussing the agenda item at the last meeting. The Administration also submitted an information paper. 5. Mrs Regina IP stated that she agreed to the need for strengthening coordination with different departments or stakeholders in the preparation of the Budget, but the Budget-related work concerned had existed for years, and staff responsible for revenue and expenditure respectively under the Financial Services and the Treasury Bureau ("FSTB") could also continue to share the workload in this regard. On the other hand, although she agreed that the Government should review tax measures, she questioned why the existing staff of the Inland Revenue Department ("IRD") and/or FSO could not share the workload concerned. She was of the view that considering the knowledge of Hong Kong's tax policies among IRD staff (especially the Commissioner of Inland Revenue), the Government could Action - 5 - simply study tax policies and measures through a committee composed of government tax experts. This could more effectively supervise Hong Kong's strategic tax policies and measures, when compared to creating the proposed post which would possibly be filled by an external expert. Therefore, she was not convinced about the necessity for the creation of the proposed permanent post. 6. The Under Secretary for Financial Services and the Treasury ("USFST") advised that the holder of the proposed permanent post would be responsible for supervising the work of the proposed Budget and Tax Policy Unit ("BTPU"), including studying the approval of tax measures, or cooperating with different bureaux to study tax measures for specific industries, so as to ensure that Hong Kong would maintain its competitiveness. USFST referred to examples such as the response of the Organisation for Economic Co-operation and Development against base erosion and profit shifting, and pointed out that the holder would also assist in monitoring the latest international tax standards, assessing their relevance to Hong Kong, and formulating response measures. In addition, the holder would also support FS on tax policies and the formulation of the overall strategy and framework for the Budget, etc. With more extensive public consultations on the Budget by the Government and a growing number of proposals received, the preparation of the Budget had become an increasingly lengthy process in recent years. Many of the proposals received entailed not only financial provisions but interfaced with existing policies and measures. When considering these proposals, the Government had to closely liaise with bureaux/departments, legislators, and possibly stakeholders in relevant sectors/professions. With the growing complexity of tax policy work and an additional dimension of Budget-related work, the Government considered it appropriate that a senior directorate officer should be assigned to supervise the proposed BTPU in carrying out such tasks. USFST added that currently, there were only two directorate officers in FSO, namely the Administrative Assistant to FS and the Press Secretary to FS, and they already had their own responsibilities. 7. Mr Michael TIEN stated that at present, one of the tasks of the Tax Policy Unit ("TPU") of FSTB was to enhance Hong Kong's tax regime and explore the broadening of tax base and revenue generation. He enquired what kind of new tax types had been studied by TPU since it was set up in 2017-2018; and, after the creation of the proposed post in which the holder would supervise the newly established BTPU, consultation would be conducted on what kind of new tax types, as well as the timetable for the relevant work. Action - 6 - 8. USFST advised that an important aspect of public finance management was to ensure financial stability and the availability of adequate resources to support Hong Kong's sustainable development. In this regard, the Government endeavored to promote economic growth with a view to increasing government revenue, and would continue to examine the tax regime and tax rates. The Government always maintained an open attitude on proposals to develop new sources of income, and was happy to receive and consider alternative views, and would draw reference from tax measures of other economies. 9. At the request of Mrs Regina IP and Mr CHAN Han-pan, the Administration would provide after the meeting written response on (a) key performance indicators ("KPIs") of the proposed post; and (b) members' suggestions on increasing the betting duty and/or allowing the Hong Kong Jockey Club to consider introducing a new type of sports betting duty.