Hong Kong will continue its low-tax regime as it has been one of the hallmarks of its success.

This was the message from Chief Executive Tung Chee Hwa during his Q&A session at the Joint Business Community Luncheon at the Convention & Exhibition Centre today.

Mr Tung said although broadening the tax base cannot be ruled out at this stage, our low-tax framework will remain.

"I believe very strongly in the low-tax regime because that is why Hong Kong has been successful and that is what we will continue to try to do in the years ahead," he said.

"I think if we move away from a low-tax base, we would be in real trouble as a city, or as Asia's world city. Whether the tax base needs to be broadened, there have been talks about this and the Government is looking at all these options, but the fundamental issue is that we need to keep the tax low. That is very clear."

Meanwhile, Mr Tung reiterated that although Hong Kong is entering the high-risk period for SARS, strong prevention and detection measures are in place and we are very well prepared to handle any possible sporadic cases that may arise.

"There is such a heightened degree of work that is now being done by various Government departments in checking the cross-border flow of people. Secondly, we are now good at early detection. Thirdly, our contact tracing is one of the best you can find anywhere in the world. Fourthly, our hospital authorities are well prepared and have isolation wards," he said.

"We are on a heightened degree of alertness and we are ready for this. I have every confidence that we will be able to manage this situation. I can assure you that there will be total transparency."