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LCQ9: Number of salaries taxpayers and respective tax rate


Following is a question by the Hon Bernard Chan and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (December 3):


In his statement on Hong Kong's economy and management of public finances, made at the Council meeting on October 22, 2003, the Financial Secretary said that "only slightly over one third of the working population need to pay any tax on their salaries. Only 100,000, which is 3% of the working population, will contribute 59% of the salaries tax." In this connection, will the Government inform this Council of the total number of taxpayers paying salaries tax only in each of the past three financial years and, among them, the respective numbers of taxpayers whose salaries tax payment represents only five percent, 10 percent and 15 percent of their annual total assessable income less total deductions?



The numbers of taxpayers liable to salaries tax were 1,215,131 in 2000-01, 1,208,336 in 2001-02 and 1,097,036 in 2002-03 (Note).

Depending on the year in question, for 70.8% to 75.8% of salaries taxpayers, their effective tax rate (tax amount divided by the assessable income) was below 5%. For 15.5% to 18.8% of taxpayers, their effective tax rate was 5% to 9.99%. For 8.7% to 10.1% of taxpayers, their effective tax rate was 10% to 14.99%. For 0% to 0.4% of taxpayers, their effective tax rate was 15%. (Details)

If the basis for calculation is changed from assessable income to assessable income less deductions, the respective percentages were 69.3% to 74.4%, 15.8% to 19.1%, 9.8% to 10.6% and 0% to 1.1% respectively.

Note: Income earned in a year is principally assessed in the following year. As at December 2, 2003, the assessing program for the year of assessment 2002-03 has not been completed. It is expected that the number of taxpayers in 2002-03 will be higher than 1,097,036 and very much the same as in 2001-02.

Ends/Wednesday, December 3, 2003


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