AmCham Hong Kong Calls For Alternative To Sales Tax

by Mary Swire, Tax-News.com, Hong Kong

27 January 2005

The American Chamber of Commence in Hong Kong has urged the government to broaden the territory’s tax net, although it warned that proposals to introduce a sales tax will burden business and damage the city’s competitiveness.

At a press conference held on Tuesday, Chamber Chairman Jon Zinke suggested that a tax system is needed which brings a higher proportion of Hong Kong’s population into the tax net, forcing stakeholders and politicians to use the system more responsibly.

The government of the SAR is proposing to widen Hong Kong’s tax base through the introduction of a sales tax, which could be put in place within the next three to four years.

However, according to the Chamber, a sales tax will be complex for businesses to administer, punish the low-paid most, and will damage Hong Kong’s retail competitiveness.

Zinke called on the government to consider a system where more workers could be taxed, but which does not discriminate against those on lower incomes.

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