Hong Kong Official Rejects Call To Reduce Taxes

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

21 February 2002

As part of pre-budget lobbying in Hong Kong, the Society of Accountants and the local branch of CPA Australia have been urging the Government to halve the 16% cent profit tax for multinational companies in order to attract more of them to the SAR. But yesterday Mike Rowse, director-general of investment promotion for Invest Hong Kong, downplayed the need for such a measure, saying: "In the past 18 months, none of the multinationals to have set up regional headquarters in Hong Kong has requested incentives."

Instead, Mr Rowse says that Hong Kong should concentrate on ensuring local employees speak good Chinese and English, and should consider easing entry to the SAR for mainland professionals to create a larger pool of talent from which the multinationals could hire.

Mr Rowse, who was attending the opening of British sandwich chain Pret A Manger's first shop in Hong Kong and Asia, said that other countries such as Singapore and Thailand might need to offer tax incentives to compensate for their weaknesses compared with Hong Kong.

Pret A Manger chairman Andrew Rolfe said the firm had set up its Asian headquarters in Hong Kong not because of low taxes, but because Hong Kong was an international financial centre similar to New York and London. "We do well in big cities and Hong Kong is one of the biggest in Asia," he said.

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