Yes, it is real, for a "minority"
Numbers (I have not checked in details):
1 Milllion living on HK Island (with the majority living in places like Chai wan, aberdeen...)
2.5 million living in Kowloon (wth the majority living in places like Mei Foo, Sham Shui Po, Sheung Cha Wan...)
3.5 million livng in NT (with the majority living in places like Tseun Wan, Kwai Fong, Tai Wai, Tuen Mun....)
So, as a discussion point, I presume most of us on this site are in the 'tax paying elite'.
Therefore, how do you feel about your tax situation?
* Don't compare to other countries, stick to HK
* Do you feel you pay too much relatively? too little?
* Do you feel you get a 'fair share' of the benefits offered (which you've paid for in tax dollars) ?
HK, despite it's signs of affluence, has one of the highest levels of income inequality in the developed world. Those 60% of workers don't pay tax simply because they don't earn enough.
The monthly median household income of the poorest 10%: HKD 3000
The monthly median household income of the richest 10%: HKD 80900
(Source: Oxfam, 2010)
HKD 3000 a month works out to HKD 100 a day. For a family of four, thats HKD 25 (USD 3.2) per person, per day. That's frankly impossible to live on in a city like Hong Kong.
Inflation is high in Hong Kong simply because it's "imported" inflation, due to:
a. a peg to the US dollar, which means that interest rates can't be raised top tame inflation.
b. soaring global food costs
Yes you hear the stories of the fine car in public housing but the salaries paid here to locals are not all good ones.
Low taxes mean that when you are old their aren't the gov't services like in Canada to support people. Look into the windows about store fronts and see warehoused seniors - shocking.
It is a vicious cycle as companies bid down services to get the best price and companies then pay peanuts and work for little. This seems so common here in IT consulting. I know a wealthy business guy in Costa Rica who not only ensured his workers shared in the fruits of their labour (profits) he would continually increase his store managers share of the ownership when they hit the targets he set with them for each year. He gets people at all levels buying in as they make more money.
Here they pay badly and get turnover rates of 33-50% and accept that as the cost of doing business. In North America all those CEOs got fired in the '70s who had problems in excess of 20% vol. TO.
I used to wonder how these old store fronts here in HK open up every day with nothing but junk in them and no business. I am told - they own the place or they'd be done like dinner. What I don't understand is how they can't see the value of their asset and become a landlord.
Last edited by Football16; 07-10-2011 at 11:05 AM.
When we talk about Tax, we only think of Income and salaries tax. In Hong Kong the biggest tax is indirect the cost of your Home. The high cost of the property, further increases your rates. So whether you are a owner or renter , a major chunk of your income goes to the HK Government.
Then there is a tax on Tobacco and Alcohol. Do not forget Business certificate costs HK$2,500 in a normal year. Then there is stamp duty on the property and shares. So ultimately every one is a tax payer.
If 60% of workers pay no salary tax and a lot of foreigners are the 'tax paying elite', I wonder what percentage of the total salaries tax take falls upon foreigners? It must be high.
robert... i don't know which gov't housing you've been to, but my hubby grew up in a "larger" flat (his father was a civil servant, large-truck driver).... what did they have?
250' for 2 children & 3 adults (his uncle lived with them). if he hadn't been a civil servant, they would likely have only gotten 200'.
think about it, that is probably smaller than your living room.
3000HKD per month for a family of four...extremely tough but not impossible.
Government House: 800HKD p/m with no utililities paid for by Government or more likely homeowner be it a house or apartment.
Groceries from wetmarket and street vendors 1500HKD per day
Unlimited data contract for iphone 230HKD p/m
Random plastic crap to hang off said iphone 300HKD
This family has savings!