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It emerged yesterday that finance officials have yet to decide if there is conclusive evidence of chronic deficits.

This could ease pressure on the introduction of a consumption-based levy.

A senior government source said the administration was convinced it was fair for travellers at land checkpoints to pay for using immigration facilities.

The new levy would also provide a stable recurrent revenue for the Government to help avoid the fluctuations in income caused by economic ups and downs, the source said.

"We don't see why we can levy passengers on air and sea transport but not those on land," the source said.

She said the Finance Bureau was still studying the technical details of the new levy, including the method of collection.

"The public will be fully consulted on a detailed proposal if the Government decides to go ahead."

The idea of a land departure tax was floated in last year's budget, but no timetable was set.

Major parties have opposed the land departure levy and some argue that higher rail fares for Lowu-bound passengers have been a tax in disguise.

The source argued the "premium fare" for Lowu-bound travellers had helped subsidise other train passengers, and without it the pressure for fare rises would be much higher.

"It's wrong to say the KCRC (Kowloon-Canton Railway Corporation) has a monopoly.

"Travellers can always take a bus and use the Lok Ma Chau checkpoint. It's fair to charge those who use it," she said.

Senior finance officials have warned of the need to raise revenue to help avoid deficits becoming an entrenched part of the system.

Officials are alarmed that recurrent government expenditure has grown much faster than recurrent revenue increases since 1998.

One official indicated last month that a sales tax could be introduced when the Financial Secretary delivered his budget on March 8, pending a full assessment of the revenue-expenditure figures at the end of this month.

The Government needed to introduce a sales tax if the deficits were found to be "cyclical" but not seasonal, he said.

Deputy Secretary for Treasury Carrie Lam Cheng Yuet-ngor said yesterday:

"I think whether the deficits are cyclical is still inconclusive . . . but our problem in recurrent expenditure and revenue has become obvious."

Government figures show recurrent revenue exceeded expenditure by $29 billion to $63 billion between 1993 and 1997.

But the trend has been reversed since then.

A deficit of $5.8 billion was recorded in 1998-99, with $31.9 billion forecast for the current year and $14.3 billion predicted for the next budget.

The source said it was imperative for the Government to move to secure its source of revenue if deficits were found to be cyclical in "two to three months' time".

She said property-related revenue contributed more than 40 per cent of total revenue.

The fall in the property market would affect revenue from land premiums, stamp duty and profits tax from companies, she said.