The Bank of China Group has come out in support of the Hong Kong government's proposals to widen the economy's tax base.
The Bank was commenting on proposals outlined by a committee set up by the Hong Kong government to look at the available tax options.
The committee, made up of academics and practitioners, released a consultation paper last month that proposed 13 tax options ranging from raising salary taxes to mainland border taxes. A controversial suggestion that the government should introduce a consumption tax was also included.
The Bank of China Group said it believed the tax system in Hong Kong urgently needed revamping, because it is too narrow and its revenue composition diverges from international levels, reported the South China Morning Post.
The Bank said it believed such concerns would spark instability in revenues and threaten Hong Kong's competitiveness.
The Bank of China Group's comments are in contrast with those of Standard Chartered Bank, which said it regarded the proposal as inappropriate on the back of the government's HK$400 billion ($51.3 billion) reserves.
