Global tax reform 'could net HK billions' - RTHK
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Global tax reform 'could net HK billions'

2021-02-26 HKT 10:31
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  • Global tax reform 'could net HK billions'
Financial Secretary Paul Chan says Hong Kong is still considering alternative ways of raising funds through the tax system, and is closely monitoring international moves to impose minimum global tax rates that could deliver billions of dollars in revenue.

Chan made the comments on an RTHK Radio 3 phone-in two days after delivering an unexpected rise in the tax on share trading in his budget. Some callers praised the move and suggested Chan go further by taxing dividends and capital gains.

Chan said imposing a tax on dividends could affect people such as retirees who rely on dividend payments. He also pointed out that profits tax was set higher than tax on individuals.

There was also the question of whether to tax other types of investment, such as property.

He said changing the tax system was "not something that's not worth considering", but: "If we want to change our tax system, we need to have a more comprehensive assessment and alternative analysis, so that the community can have an informed debate and also make a conscious choice.

"At the moment this might not be the right time. Internally, in the government, we have done some research and we are also observing the international tax landscape."

He said Hong Kong would follow the work of the Organisation for Economic Cooperation and Development on digital taxation and global minimum tax measures, which could open up billions of dollars in additional revenue.

The increase in stamp duty on share trading has rattled the local bourse, which fell three percent after the announcement before recovering some of its losses on Thursday.

Chan said the decision was based on research, and noted that while stamp duty in the SAR was slightly higher than on the mainland, other fees and charges made the mainland markets "not cheap".

He said liquidity, a lack of exchange controls and expanded product offerings were more important to developing the market. He pointed out that someone buying HK$1 million in shares would pay only HK$300 more in stamp duty.