The Motor Vehicle First Registration Tax proposals will not affect Hong Kong's image as an international business and finance centre, the Secretary for Financial Services & the Treasury says. 

The Government understood the impact these tax proposals could have on the car business, Frederick Ma told the media after a Hong Kong General Chamber of Commerce luncheon.

It hopes consumers will buy cars again after overcoming the short-term psychological barriers the tax could raise.

Even after the introduction of the new tax, Mr Ma added, the Motor Vehicle First Registration Tax in Hong Kong would still be lower than that imposed in neighbouring countries.

In 2001/02, the Transport Department issued 33,000 new private-car licences. Only 2,000 of these cars would have had a taxable value over $500,000 under the newly proposed vehicle taxation system.