Tax Revenues Fall in Hong Kong

May 4, 2010 Taxation in Hong Kong

Honk-KongAt a recent press conference the Commissioner of Inland Revenue of Hong Kong revealed that tax revenues in the special administrative region of the People’s Republic of China fell by 6 percent during the 2009-2010 financial year.

On May 3rd Chu Yam-Yuen, Commissioner of Inland Revenue Department of Hong Kong, held a press conference publicizing the 2009-2010 financial year tax revenue results. In total, HKD 179.1 billion (approx. USD 23.07 billion) was collected, compared to HKD 190.53 billion (approx. 24.5 billion) in the 2008-09 financial year. Corporate tax revenues were reported to have fallen by 26 percent, to HKD 76.6 billion (approx. USD 9.7 billion). Conversely, personal tax revenues and property tax revenues rose by 6 percent and 79 percent respectively. Increases were also seen in the cumulative collections of Estate Duties, Betting Duties, Stamp Duty, Business Registration Fees and Hotel Accommodation Tax.

Chu Yam-Yuen also revealed the Inland Revenue’s forecast for the 2010-2011 financial year tax revenues. Total revenues are expected to fall by a further 7 percent to HKD 166.3 billion (approx. USD 21.4 billion). Revenues from personal and corporate taxes are expected to remain relatively stable, while the drop will be accounted for by Stamp Duty collection, which is projected to only reach HKD 30 billion (approx. USD 3.8 billion).

The Commissioner also revealed that the Inland Revenue is currently in the process of distributing in excess of 2 million individual tax returns. Tax payers are being encouraged to submit their returns via the Inland Revenue’s new electronic filing system, and receive a one month extension on the submission deadline. The Commissioner also revealed that the Department will now consider any business with incomes below HKD 2 million to be a “small business” and subsequently be eligible for electronic filing.

Photo by Elsemiguel