The Government proposed that, for the first five years after the GST's introduction, all revenue it would generate after deducting administrative costs would be returned to the community as tax relief and other compensation measures, for example, salaries or profits tax reduction, or to increasing public spending on education, health, social welfare, law and order or infrastructure.
[3] In a surprise announcement made on 5 December 2006, Henry Tang Ying-yen withdrew the plan citing lack of public support.
"It's clear ... that we've not been able to convince the majority to accept a GST as the main option to address the tax base problem," he said.
[3] The withdrawal was linked to the comments, three days earlier, of Chinese state leader Wu Bangguo to senior Hong Kong officials "to keep their fingers on the pulse of the people" and to foster "social harmony", and to the impending sub-sector polls for the Election Committee which will pick the new Chief Executive in March 2007.
[3] However, after the announcement, Henry Tang insisted the decision to withdraw the proposal was "entirely my own," and free of any political consideration.