HKBU POLS 7050 Public Administration Topic: Is Goods and Services Tax an appropriate measure to broaden the tax base of Ho...
How Narrow is our tax base? <ul><ul><li>Over-reliant on a limited range of tax </li></ul></ul>
How Narrow is our tax base? <ul><ul><li>Heavily relied on small number of tax payers </li></ul></ul>
How Narrow is our tax base? <ul><ul><li>Heavily relied on small number of tax payers </li></ul></ul>
Why we Need tax reform? <ul><ul><li>The income of Hong Kong Government is unstable </li></ul></ul><ul><ul><li>Hong Kong’s ...
Principles of designing a good tax system <ul><li>Neutrality </li></ul><ul><li>Fairness </li></ul><ul><li>Efficiency </li>...
Options for broadening the tax base <ul><li>To reduce allowances from the existing base (e.g. Reduce the allowances and de...
Evaluation
Evaluation
Evaluation
Evaluation
<ul><li>GST is an appropriate measure to broaden the tax base of Hong Kong? </li></ul>
GST <ul><li>Value added tax </li></ul><ul><li>Indirect tax </li></ul><ul><li>Collect at each stage of production and distr...
GST mechanism GST on sale (output tax) GST on purchase (input tax) Less Net GST payable (positive amount) Net GST refundab...
GST proposed in HK <ul><li>Proposed tax rate 5% </li></ul><ul><li>Registration threshold >$5million per year </li></ul><ul...
GST pros & cons Pros Cons Predictable Difficult to cancel Low rate Tax rate raise continuously Stable & continuous Increas...
Feedbacks from society
Conclusion <ul><li>GST seems fit the criteria for broadening tax base </li></ul><ul><li>Strong objections </li></ul><ul><l...
End Thank you !
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Is Goods and Services Tax an appropriate measure to broaden the tax base of Hong Kong?

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Is Goods and Services Tax an appropriate measure to broaden the tax base of Hong Kong?

  1. 1. HKBU POLS 7050 Public Administration Topic: Is Goods and Services Tax an appropriate measure to broaden the tax base of Hong Kong? TSIM King Man, 09418210 YEUNG Ching Yin Masahiko, 09410201
  2. 2. How Narrow is our tax base? <ul><ul><li>Over-reliant on a limited range of tax </li></ul></ul>
  3. 3. How Narrow is our tax base? <ul><ul><li>Heavily relied on small number of tax payers </li></ul></ul>
  4. 4. How Narrow is our tax base? <ul><ul><li>Heavily relied on small number of tax payers </li></ul></ul>
  5. 5. Why we Need tax reform? <ul><ul><li>The income of Hong Kong Government is unstable </li></ul></ul><ul><ul><li>Hong Kong’s advantage is weakening </li></ul></ul><ul><li>Hong Kong is facing ageing problem </li></ul>
  6. 6. Principles of designing a good tax system <ul><li>Neutrality </li></ul><ul><li>Fairness </li></ul><ul><li>Efficiency </li></ul><ul><li>Effectiveness </li></ul><ul><li>Simplicity and Certainty </li></ul>
  7. 7. Options for broadening the tax base <ul><li>To reduce allowances from the existing base (e.g. Reduce the allowances and deductions under salaries tax) </li></ul><ul><li>To expand existing taxes base (e.g. Increase the tax rate of the Salaries Tax or Profits Tax) </li></ul><ul><li>To introduce new taxes to the base (e.g. Capital Gain Tax, Electricity Tax, Goods and Services Tax) </li></ul>
  8. 8. Evaluation
  9. 9. Evaluation
  10. 10. Evaluation
  11. 11. Evaluation
  12. 12. <ul><li>GST is an appropriate measure to broaden the tax base of Hong Kong? </li></ul>
  13. 13. GST <ul><li>Value added tax </li></ul><ul><li>Indirect tax </li></ul><ul><li>Collect at each stage of production and distribution </li></ul><ul><li>Vendor need to register in advance </li></ul>
  14. 14. GST mechanism GST on sale (output tax) GST on purchase (input tax) Less Net GST payable (positive amount) Net GST refundable (negative amount)
  15. 15. GST proposed in HK <ul><li>Proposed tax rate 5% </li></ul><ul><li>Registration threshold >$5million per year </li></ul><ul><li>Estimated annual revenue $30 million </li></ul>
  16. 16. GST pros & cons Pros Cons Predictable Difficult to cancel Low rate Tax rate raise continuously Stable & continuous Increase admin. cost Fair: spend more, pay more Not fair to low income group Difficult to avoid Consumption shift to nearby regions Only charge to large business Also affect medium and small businesses
  17. 17. Feedbacks from society
  18. 18. Conclusion <ul><li>GST seems fit the criteria for broadening tax base </li></ul><ul><li>Strong objections </li></ul><ul><li>Not the time to bring it in </li></ul>
  19. 19. End Thank you !

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