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Should Hong Kong introduce VAT (GST)

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  1. #31

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    Quote Originally Posted by flameproof:
    So you believe GST/VAT will warm the heart of developers and make them cry, and then out of pure kindheartedness will work very hart, only with the less well off people in mind, so even poor people can now buy housing and become happy, because exactly that is what property developers always wanted to do, very deep in their heart, but couldn't because the evil system forced them to sell high, or even a bit higher, but a GST/VAT will bring out the good kindhearted developer. I don't think so.
    Umm...where did I say any of that?

    I said the tax base has to be widen. Or are you saying we should all be happy that the government and the property developers continue to make mega bucks from land sales at the expense of your average Hong Konger?
    Last edited by Cho-man; 26-02-2015 at 09:14 PM.

  2. #32

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    Quote Originally Posted by East_coast:
    It is a deeply regressive tax but offers stable income and is spread throughout the value chain and doesn't harm imports and exports

    Unfortunately there are probably two forces at play

    1) Tax harmonisation with the PRC
    Only 30 years left to get the tax take and spend in China to be comparable to the PRC. The PRC has VAT (although appalling regulated)

    2) Loss of Hong Kong property premium
    Currently HK Gov can demand a premium for land here as it offers a stable and free society that operates within the rule of law. When this disappears so will the ability to charge a premium.


    There are MANY things that should be looked at to offer stable tax returns ahead of VAT. Reducing property tax and not giving salary tax rebates.

    Other areas that should be taxed are:
    - Energy
    - Fuel
    - Rates
    - Tourism
    - Luxury taxes (e.g. fancy cars and handbags)
    - Bad food - Sugar & Fat
    - Booze
    Agree that VAT should not be considered - it's an unfair tax because it hurts those that can least afford to pay it. If you try to make it fairer to those lower income the only way you can do it is to put more money in their pockets through grants, so you will have a social security burden which the government is trying to avoid.

    Based on the UK experience, you would need an army of field auditors to ensure compliance and tackle tax cheats, another costly administrative measure. Businesses would be placed under another administrative burden to complete input and output VAT returns.

    Also, the economic situation is not conducive to another tax. In Hong Kong, consumers are already paying a premium to goods and services, it's the "super profit factor" due to the high rent. We simply cannot afford another amount to the consumer price levels now, the prices are already maxed out because on the high rents.

    Hong Kong firstly needs to bring down property costs to minimize the price premium due to high rental costs. We can do this by taxing the max out of profits of commercial property investment and giving additional relief to renters, but care and a gradual approach must be taken to minimize the risk of negative equity to innocent existing residential home owners. In short, we need to ask the property tycoons to pay more, so this idea will never get off the ground until we have a government that is accountable to the electorate. Only when we get rid of the rent premium on consumer prices can we think about further taxes on consumer activity.

    Agree with your suggestion to broaden the tax base but any such suggestion should not put pressure on those least able to afford it.
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  3. #33

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    Quote Originally Posted by East_coast:

    Other areas that should be taxed are:
    - Energy
    - Fuel
    - Rates
    - Tourism
    - Luxury taxes (e.g. fancy cars and handbags)
    - Bad food - Sugar & Fat
    - Booze
    Fuel, Cars and Booze are already taxed.

    A non-refundable tax on goods would we great, if the government manages to return the money to residents by reducing other taxes, rates, public housing rent etc. So that in effect only tourists pay the new tax
    Cho-man likes this.

  4. #34

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    Quote Originally Posted by mrgoodkat:
    Fuel, Cars and Booze are already taxed.
    They could all be taxed A LOT more with little impact. Billions are left on the table from free roadside parking, cheap tolls and reduced land sales fees for car parks.
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  5. #35

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    Quote Originally Posted by East_coast:
    They could all be taxed A LOT more with little impact. Billions are left on the table from free roadside parking, cheap tolls and reduced land sales fees for car parks.
    Arrrgghhhh, this still f'kin annoys me. There is no free roadside parking, just piss poor enforcement of current laws. Get the HKP out there and fine every last one of the mofo's. There's billions right there.


    Sent from my iPad using GeoClicks
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  6. #36

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    Quote Originally Posted by jaykay:
    Arrrgghhhh, this still f'kin annoys me. There is no free roadside parking, just piss poor enforcement of current laws. Get the HKP out there and fine every last one of the mofo's. There's billions right there.
    Sorry 'near free' roadside parking. And yes Billions left in the gutter

  7. #37

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    Original Post Deleted
    Probably

    But even in a country where parking is cheap Chicago raised a US$1B by contracting out the operation of their parking meters. Currently SHKP have a nice deal maintaining Hong Kong's parking meters but the city could probably double the spaces offered and treble the fees pays. This combined with tighter enforcement probably suggests $2b is being left in the gutter.

    Revenue from meters is around $330m and hasn't changed for 20 years.

  8. #38

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    Quote Originally Posted by East_coast:
    VAT is simple and can be set very low although it does favour the rich and large companies.

    Easty, I often agree with your analysis. But it's a crime to use the words "VAT" and "simple" in the same sentence. Until you have tried to grapple with it as a business, don't. Please. VAT is the death of small business.

    And as for VAT on electricity and other essential services..... WHY ffs? That's just about the least progressive kind of taxation one could think of. At least taxing luxury goods would be progressive. Not essentials.
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  9. #39

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    Quote Originally Posted by HK_Katherine:
    Easty, I often agree with your analysis. But it's a crime to use the words "VAT" and "simple" in the same sentence. Until you have tried to grapple with it as a business, don't. Please. VAT is the death of small business.

    And as for VAT on electricity and other essential services..... WHY ffs? That's just about the least progressive kind of taxation one could think of. At least taxing luxury goods would be progressive. Not essentials.
    Actually I think if done properly then its quite simple for any business to handle. Malaysia are rolling out a 6% GST starting starting 1st April and I'm setting up my company's ERP system to handle it now and its not that hard. Actually the way they are doing it is similar to Australia with the business activity statement type of report which is admittedly more complex to how its done in Japan, Singapore, Korea, but still pretty easy. China and India on the other hand have completely messed up systems and I agree are difficult to manage but should HK ever decide to make this a reality I don't see any reason why they can't make it as simple as possible.
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  10. #40

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    Quote Originally Posted by bdw:
    Actually I think if done properly then its quite simple for any business to handle. Malaysia are rolling out a 6% GST starting starting 1st April and I'm setting up my company's ERP system to handle it now and its not that hard. Actually the way they are doing it is similar to Australia with the business activity statement type of report which is admittedly more complex to how its done in Japan, Singapore, Korea, but still pretty easy. China and India on the other hand have completely messed up systems and I agree are difficult to manage but should HK ever decide to make this a reality I don't see any reason why they can't make it as simple as possible.
    Those BAS statements are a PITA
    Skyhook likes this.

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