Hong Kong Accounting Group Releases Tax Wish List

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

12 December 2001

An accounting firm in the SAR has outlined a Christmas tax wish list which if implemented, would cost the government around $600 million in lost revenue.

Released on Monday by the Hong Kong brach of CPA Australia, the 'Christmas Wish List to Financial Secretary' detailed a range of incentives which the accounting body would like to see included in Antony Leung Kam-chung's next budget.

These included a halt on the introduction of new taxes and a freeze on increases of existing levies, the abolition of stamp duty on stock transactions, the abolition of capital duties on new companies setting up in the jurisdiction, and the removal of the 16% profits tax on corporate investors trading Hong Kong bonds and investment funds.

With the SAR's economy in the state that it is at the moment, the CPA Australia wish list is unlikely to raise more than a hollow laugh from the Finance Minister, who, faced with a HK$60 billion budget deficit for this fiscal year, is unlikely to be willing to sacrifice any tax revenue in the near future.

However, speaking to the South China Morning Post on Tuesday, Sarah McGrath, the Chairman of the accounting group's tax committee in Hong Kong, argued that such moves, if implemented, would attract more international investment to the jurisdiction, and would thus increase tax revenues in the long run.

'There is a consensus that Hong Kong needs to reaffirm its position as the financial centre of Asia by making changes to existing tax legislation that promote the establishment of financial services enterprises in Hong Kong,' she explained.

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