Hong Kong Government Confirms Tax On Foreign Maids

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

28 February 2003

Speaking on Wednesday, Hong Kong's Chief Secretary, Donald Tsang announced a number of changes to the tax treatment of both the wealthiest and poorest groups of foreign visitors to the territory.

In a move likely to prove enormously unpopular, Mr Tsang revealed that an HK$400 per month tax will be levied on the employers of foreign domestic workers from October 1. This is almost certain to result in a wage cut of a similar amount, as employers pass the burden of the new levy onto their maids, cooks, nannies, and drivers.

Responding to the policy announcement this week, international charity organisation, Oxfam condemned the move to reduce still further the income of 'one of the poorest sectors' in Hong Kong:

'It is unjust for the government to ask foreign domestic helpers struggling to make ends meet to bear the pain of Hong Kong's economic woes,' it told the Hong Kong Standard.

The Chief Secretary for Administration also announced that as of the start of the new financial year, foreign investors (with the exception of those from the Chinese mainland) investing more than HK$6.5 million in property or other securities will be granted the right to reside in Hong Kong. Previously, the money was required to be invested in a business.

However, Indian Chamber of Commerce chairman, Raj Sital was less than impressed by the changes announced on Wednesday, arguing that the residence threshold for investors is too high:

'The minimum should be kept to US$500,000 or HK$5 million at the most,' he told the Standard, adding that: 'We should not only look at the capital brought in but also at other areas, such as the businesses they bring in and employment opportunities created for local people.'

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