In keeping with his goal of sharing the fruits of Hong Kong's prosperity, Financial Secretary Henry Tang has introduced proposals to roll back some duties - and waive rates.

To help promote the development of Hong Kong's catering industry, tourism and wholesale and retail alcoholic beverage trade, Mr Tang would like to see duty on alcoholic beverages cut.

Reductions, rebates: Duties on alcoholic beverages and property stamps will fall, and rates payers will enjoy a two-quarter waiver.

Some alcoholic beverage rates to be halved

He proposes halving the duty rate on beer and other types of liquor containing not more than 30% alcohol, from the current 40% to 20%, and that on wine from the current 80% to 40%. The measure would come into immediate effect, and would cost the Government $350 million a year.

"During the Budget consultation period, some people suggested that the Budget should be more visionary," Mr Tang said.

"For instance, they said the duty on alcoholic beverages should be abolished to boost economic activities, increase employment and promote the development of Hong Kong as the region's wine exhibition, trading and logistics centre. I am willing to consider this innovative idea further if it enjoys broad community support."

The Financial Secretary would also like to bring the quantities of tobacco and liquor that local residents are allowed to bring in duty-free when entering Hong Kong into alignment with those for visitors.

Hong Kong residents may currently bring in just 750ml of still wine duty-free. After relevant laws are passed, they will be allowed to bring in up to one litre of any liquor duty-free - the same as visitors are currently permitted.

He would also cut the number of duty-free cigarettes visitors are allowed to bring in from the existing 10 packets to just three, to match the level residents are allowed.

Since most middle-class families dream of purchasing their own homes, Mr Tang would like to see stamp duty on transactions of properties with a value between $1 million and $2 million cut from 0.75% to a fixed amount of $100 - the same level of duty as for properties with a value at or below $1 million.

This proposal comes into immediate effect, and will benefit about 30,000 home buyers at a cost to the Government of about $250 million a year in lost revenue.

Rates payers will enjoy a waiver for the first two quarters of 2007-08, subject to a ceiling of $5,000 per quarter for each rateable tenement.

Mr Tang expects 99% of domestic properties and 86% of non-domestic properties to benefit, paying no rates in these two quarters. The move will cost the Government about $5.2 billion in 2007-08.