Taxes in Hong Kong

Hong Kong is a government with a chief executive officer who is a part of a special administrative region or SAR. A state council is a part of this one country with two systems of government.
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Hong Kong is financially dependent on the government of the People’s Republic of China for its defense and for its foreign affairs.Taxes in Hong Kong 2015

The tax system in Hong Kong is an indicator of its culture and social norms. The personal income rate for this country is relatively light compared to other systems of taxation in other countries. Hong Kong’s personal income tax averages to be around 15.36 percent, and has ranged from a low of fifteen percent to a high of sixteen percent over the past decade. Personal income tax is levied against personal income, pension plans, interest and dividend yields.

A corporate rate of taxation in Hong Kong ranges from sixteen percent at its lowest point to a high of 17.50 percent. An average corporate rate is around 16.50 percent. Corporate rates for the companies that do business within the jurisdiction of Hong Kong have remained relatively the same over the past ten years.

Personal income tax rates within this country have been levied against a population that has had a low unemployment rate. Unemployment in Hong Kong has ranged from a record low of one percent in July of 1989 to a record high of 8.5 percent in June of 2003. An average unemployment rate of 3.72 percent was recorded from 1981 to 2015. In February of 2015, 3.30 percent of the employable adults within this jurisdiction were unable to find work on a regular basis and with a full time employer.

Hong Kong has been able to keep its income taxes and business taxes low throughout most of its history. The low personal income tax of around fifteen percent is one of the lower personal income tax rates when compared to other modern countries. The country of Hong Kong continues to operate at a substantial surplus and has low government spending. The accumulated and enormous fiscal reserves bring in interest revenue for the government.

The country has experienced a significant growth in its economy since 1945. Its tax system is said to be one of the important financial factors that has led to a government fiscal surplus. The Hong Kong government has low public spending as well. The larger personal income tax rates are levied against only the relatively affluent members of its population. There are other circumstances within this government that should be noted. Hong Kong has a large poverty population, and the living standards of a significant number of its citizens are noted to be lower in comparison to other affluent societies.

The citizens of Hong Kong in the small income and medium income brackets are hardly taxed at all, and this important factor has helped to advance these segments of the population. Its overall tax system is described as successful and is an important reflection of Hong Kong’s culture.