HK launches tax-reform consultation
(Xinhua)
Updated: 2006-07-19 19:25 The proposed GST is expected to have a temporary, modest impacton household
living costs. For example, with a 5-percent GST, the one-off, short-term price
increase is estimated to be approximately 3 percent.
To alleviate a GST's impact on households, a number of relief measures are
proposed alongside its introduction, such as reducing tax rates for all existing
taxpayers including rates for Salaries Tax, Personal Assessment, Property Tax
and Profits Tax for unincorporated businesses.
The proposed GST framework also includes business tax-relief measures, such
as a cut in profits-tax rates and abolishing the capital fee to encourage more
businesses to incorporate in Hong Kong.
It is estimated that there would be approximately 20 billion Hong Kong
dollars (US$2.58 billion) remaining after meeting all administrative costs and
the costs of providing the proposed household, business and charities
compensation measures. There would be many options available to return the
remaining balance of funds to the community in the form of tax relief or other
alternatives.
"We are aware that GST introduction would have widespread implications for
Hong Kong. Therefore, we will listen to public views extensively before making a
recommendation to the government of the next term to consider whether and if so,
how Hong Kong should pursue tax reform and introduce a GST," Tang said.
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