Tax revenue collected dropped $1.1b to $290.2b

No thanks to waived business registration fees.

Total tax revenue collected in the 2016-17 financial year was $290.2 billion, a drop of $1.1 billion compared with the previous year.

Commissioner of Inland Revenue Wong Kuen-fai said the dip was mainly due to the waiver of business registration fees, causing a tax revenue loss of $2.4 billion.

The profits tax collected fell 1% to $139.3 billion while the salaries tax collected increased 2% to $59.1 billion. Stamp duty collected decreased 1% to $61.9 billion. Wong forecasts total revenue collection to drop 1% to $286 billion.

He said the Inland Revenue Department has sent out 2.6 million tax returns for individuals.

Taxpayers should file their tax returns by June 2, while sole proprietors of unincorporated businesses should file their returns by August 2. Those who file their return online using eTAX have an automatic one-month extension.

The Financial Secretary proposed in this year’s Budget to increase the marginal tax bands for salaries tax, to increase the disabled dependant allowance and dependent brother or sister allowance, to raise the deduction ceiling for self-education expenses, and to extend the entitlement period for home loan interest deduction.

He also proposed a 75% reduction in profits tax, salaries tax and tax under personal assessment, subject to a ceiling of $20,000 per case.

Wong said the department will implement the measures in the 2016-17 tax bills after legislation is enacted.