Hong Kong Tax revenue rose to a record HK$378.5 billion in 2021 – 2022 FY. Despite the fact that fewer people paid salary taxes and firms made less money during the economic slump, Hong Kong collected a record HK $378.6 billion (the US $48.52 billion) in taxes for the previous fiscal year. Part of the increase in income over the previous year was attributable to an earlier carryover of gains tax payments.
Tax revenue in the 2021/2022 financial year rose to a record HK$378.5 billion – 14 percent more than the year before
According to authorities, stamp duty collections increased by 12% to about HK$100 billion. While overall revenues for businesses fell somewhat in 2021/2022. Because of the pandemic, profits for the investment and financial services industry actually increased, according to Commissioner Tam Tai-pang. A lot of firms asked to postpone paying their taxes in 2020/2021 since they expected their operations to be impacted, and this resulted in an increase in tax collection the following year.
- Mainly due to a 23 percent increase in profit tax revenue to HK$167.3 billion – Commissioner Tam Tai-pang said tax collection touched a new high of more than HK$378 billion last year, an increase by 14%. The HK$47.7 billion collected by the Inland Revenue Department in the year to the end of March was a 14 percent rise over the HK$330.8 billion collected in 2020/21. Profits tax accounted for the majority of the increase, at HK $167.3 billion, up 23% from HK $135.5 billion in 2020/21. Salaries tax climbed by HK$500 million, or 1%, to HK$75.5 billion, while stamp duties jumped by HK$10.6 billion, or 12%, to HK$99.6 billion from HK$89 billion. With stamp duties, tax income is likely to increase by 3% to HK $390 billion this year.
- Income from salaries tax grew one percent to HK$75.5 billion – Despite the fact that fewer people are paying salary taxes and firms are earning less, the increase has occurred. Tax income is expected to increase by 3% in 2022-23, reaching HK $390 billion.
- Stamp duty revenue was up 12 percent to nearly HK$100 billion – The possibility of an asset bubble is growing. Allowing the bubble to expand will eventually have an impact on the macroeconomy as well as the financial system’s stability. It will be extremely harmful to society. These actions will assist to close the supply-demand imbalance, as well as contribute to the long-term stability of our housing market and financial system.
- Tax authorities estimate tax revenue for the current financial year will increase by three percent to around HK$390 billion if the epidemic situation remains stable – Last year, three residences in the complex sold for a total of HK $670 million, and luxury housing prices are predicted to jump 15% this year. Paul Chan Mo-Po also stated that now is not the time to change the rates of the profits and wages tax, which is one of the government’s main sources of revenue.
Why is it good news for Hong Kong?
It demonstrates that the economy is functioning well and that businesses are profiting more. It implies that the government will be able to spend on critical infrastructure projects. The government now has greater funds to devote to public services. Hong Kong’s economy is a well-developed free-market economy. Low taxes, nearly unfettered port commerce, and a well-established international financial sector distinguish it. The Hong Kong dollar, which is tied to the US dollar, is lawfully issued by three major international commercial banks.
Individual banks in Hong Kong set interest rates in order to guarantee that they are market-driven. Although the Hong Kong Monetary Authority serves as a financial regulatory authority, there is no officially recognized central banking system. Its economy is guided by positive non-interventionism and is heavily reliant on global commerce and finance. As a result, it is recognized as one of the best areas to start a business.
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