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Secretary for Treasury Denise Yue Chung-yee said the Government was studying possible implementation of the proposed tax, which she said was a good way to raise revenue.

She did not say whether the Government had given the measure the go-ahead in principle.

Speculation on the new tax was revived yesterday when Financial Secretary Donald Tsang Yam-kuen began consultations with political parties and legislators on the 2000-01 Budget.

Democratic Party legislator Sin Chung-kai said his party opposed the levy, to be collected at Lowu border crossing, noting the Kowloon-Canton Railway Corp already charged Lowu-bound passengers higher fares.

"Those who are most affected and would have to pay for the departure tax are the grassroots. Imposing the new tax will increase their burden," he said.

Legislator Lau Kong-wah of the Democratic Alliance for the Betterment of Hong Kong said Shenzhen authorities would be likely to follow Hong Kong and impose a departure tax on the other side of the border.

The DAB opposed the plan, which he said would stop people going to spend money on the mainland.

Reports have said the tax would be $20 per head. Officials believe it could raise several billions of dollars per year for government funds.

The idea was first floated by Mr Tsang in the Budget in March. Officials indicated then that the tax could be introduced late this year.

Miss Yue said yesterday that officials would explain details of the proposal to the public and relevant parties after it had been worked out.

These would include an option of waiving the tax for certain groups of people, such as drivers and students, who crossed the border frequently.

Other questions to be addressed include how the tax would be collected.

A KCRC spokesman said the impact of the tax on the number of Lowu-bound passengers would depend on how high it was. Air and sea passengers are already charged departure tax.