A Short Rant About Hong Kong Taxes

I just paid my Hong Kong income tax for what will likely be the last time (because I’m leaving Hong Kong).

On the one hand, it’s easy to think about how low Hong Kong taxes are relative to most other places. It’s a flat tax, the entire form is four pages and most people do not need to hire an accountant to complete the form for them.

On the other hand, I think about John Tsang and where our tax dollars go and don’t go. (Tsang, btw, earns more than HK$3.6 million per year, as of 2013. He certainly doesn’t earn it.)

Hong Kong has amassed equity reserves that are the envy of the world. Every year, those reserves grow, because Hong Kong taxes are too high. It goes to the ludicrously unnecessary Hong Kong-Macau-Zhuhai bridge. It goes to that high speed rail that has gone way over budget and that no one needs. It went to that ridiculous new eyesore of a cruise ship terminal that even the cruise ship companies wouldn’t pay for.

It does not go to the elderly who scrounge through garbage bins looking for discarded beer cans and bits of cardboard that they can bring to a recycling center so that they can afford a tin of cat food for dinner. It does not go to the people in Hong Kong who are so poor that they live in cages in Sham Shui Po.

Taxes should be lowered – Hong Kong is in no danger of running out of money as the government makes huge amounts on real estate transactions and doesn’t need to spend money to support a military force – or the spending should ensure more equitable distribution. Raise the floor so that the minimum income for paying tax is higher and/or take some of those tens of billions of dollars sitting around and do something for the poor for a change.

3 thoughts on “A Short Rant About Hong Kong Taxes”

  1. Not sure you’ve got this right. Hong Kong taxes are already (maybe) the lowest in the world. The tax base is one of the narrowest – only 100,000 people pay salaries tax. There are no other wide ranging taxes to speak of – theres a few other bits & pieces like vehicle tax, but no sales tax or VAT for example. The reason for the enormous reserves is land sales. That is the real tax in Hong Kong and the root cause, I think, of why you are leaving Hong Kong.

    Sure, the government has oodles of cash and could give a lot of it away if it wanted, either flippantly on white elephant projects, or usefully on welfare services, healthcare, or even viable and useful infrastructure projects. But lowering taxes isn’t the solution. They should be increased and widened in line with a massive reduction on the dependency of land sales. The richest man in Hong Kong, and 23rd richest in the world pays NO INCOME TAX. Not a bean. The middle classes pay little in the way of income tax, but if they want to buy a property, they pay a massive premium to one of the property croneys. Li Kai Shing should be paying more, much much more, than zero

    1. Hong Kong collects plenty of other taxes besides personal income tax. The personal income tax rate should either be lowered or the government should be taking that excess money and using it to better provide for those in need. Having it just sitting in a bank or investment instruments enriching no one other than the government is horrendous.

  2. Ridiculous High Real Estate Prices is effectively a tax to the people…where in the world where places to live cost a little over 2000 USD/sq ft (and climbing)?? or 13-20 USD/sq ft/month for residental space? These prices are at the low end for average properties, not luxury homes or prime locations(these will be much higher) these prices are comparable to Class A/B office/commerical space elsewhere.

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