Gov’t to ensure retail price cuts after exempting alcohol, fuel levies

Wednesday, August 13, 2008
Issue 434, Page 4
Word count: 492
Published in: Macau Daily Times

By Poyi (Natalie) Leung

The Legislative Assembly yesterday approved the exemption of alcoholic beverage and fuel levies after the government representatives said they would ensure the move would lead to a reduction on retail prices.

The abolishment of consumption tax of four types of alcoholic beverages, fuels and lubricants is expected to be in effect no later than this month.

The types of alcohol which will be affected by the tax change are beers, wines, rice wines and other beverages which contain less than 30 percent of alcoholic concentration.

Secretary for Economy and Finance, Francis Tam Pak Yuen, who led a cabinet to attend the Assembly yesterday, said the government wanted the bill to avoid going through deliberation by standing committee so as to have the exemption introduced as soon as possible and to reduce local businesses’ running costs.

Thus the bill was discussed and voted on the same day yesterday which aroused some lawmakers’ concern of whether the emergency procedure was necessary.

According to Secretary Tam, the government decided to drop the levies of such products in order to increase the competitiveness of Macau’s tourism, catering and convention services, as well as to relieve local businesses, transport and logistics industries’ pressure with soaring operation costs due to rising international fuel prices.

The levies exemption will see the government’s tax revenue drop 154.24 million patacas next year and the annual inflation rate drop 0.3 percent, the Secretary added.

Although international fuel prices have been showing a reduction recently, the Secretary said Macau’s inflation rate remained high and thus the government would consider any measures that could suppress the growing cost of living.

Lawmakers Ng Kuok Cheong, Ung Choi Kun and Lee Chong Cheng were concerned whether the move would eventually benefit consumers apart from merchants or enterprises.

Secretary Tam said a reduction on ticket prices will vary on the operation conditions of ferry companies and airlines, but added that the government would keep a close eye on the market in the future to ensure an “appropriate price change” was in place accordingly.

In addition, lawmakers Au Kam San, Kwan Tsui Hang and Leong Iok Wa questioned whether the abolishment of certain levies was contradictory to the government’s environmental and transport strategies.

As the SAR government always promoted to the public the use of public transport, the lawmakers said dropping fuel and petrol levies could drive more usage of private vehicles which could eventually worsen the traffic problem as well as the environment of Macau.

Kwan Tsui Hang also said cheaper prices for alcoholic beverages might encourage consumption and affect one’s health.

She added that she hoped the government would in the future launch more long-term solutions instead of by simply cutting levies to reduce local industries’ running costs.

On the other hand, Secretary Tam told the Assembly that the bills to adjust tobacco tax as well as to prevent and restrict smoking in Macau were expected to be due in the last quarter of this year.

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