Motor Vehicles First Registration Tax
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89. The motor vehicles first registration tax (FRT) was last adjusted in 1994. The 2000-01 Budget mentioned the need to review the scope of FRT exemptions so as to update the system. We have completed the review in consultation with the trade and found that the practice of exempting air conditioners, audio equipment, anti-theft devices and distributors?warranties from the taxable value is no longer appropriate in view of changing trade practices. It is now common for vehicles to be fitted with such equipment before import. Providing such exemptions creates a loophole in the tax system. I therefore propose to abolish them. In response to the trade's requests, I also propose to increase the bandwidths and introduce a marginal tax system for private cars. In addition, we shall make suitable adjustments to the tax bands and tax rates for revenue purposes. The adjustment in tax rates will be progressive and will have a greater impact on expensive vehicles. Detailed proposals concerning the adjustments are set out in the Supplement to this Speech.
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90. These new tax measures take immediate effect under a Public Revenue Protection Order published in the Gazette today. They will generate $700 million additional revenue for the Government in a full year.
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91. To promote the use of electric vehicles, we propose to extend the exemptions for these vehicles for a further three years to 31 March 2006. This will reduce government revenue by $400,000 in a full year.
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Air Passenger Departure Tax
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92. I propose that the Air Passenger Departure Tax be increased from $80 to $120. The revised rate is still lower than the past high level of $150. This will generate approximately $400 million in additional revenue for the Government in a full year.
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Betting Duty
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93. I propose that the duty on exotic horse racing bets be increased from 19% to 20%. This will generate additional revenue of $150 million for the Government in a full year.
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