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PRESS RELEASE

(Source : Government Information Centre)

LCQ15: Information on Profits Tax and Salaries Tax

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Following is a question by the Hon Eric Li and a written reply by the Secretary for the Treasury, Miss Denise Yue, in the Legislative Council today (April 4):

Question :

Will the Government provide this Council with the following breakdowns of the revenue on the profits tax and salaries tax, estimated to be HK$41.2 billion and HK$25.5 billion respectively, in the 2000-01 assessment year:

(a) the respective amounts of taxes levied on the assessable profits and income earned in that assessment year;

(b) the respective amounts of provisional profits and salaries taxes levied on the assessable profits and income estimated to be earned in the following assessment year;

(c) the respective amounts of back taxes levied in respect of past assessment years; and

(d) the amounts of protective assessments made in respect of cases under investigation?

Reply :

President,

The requested information in respect of assessments of profits tax and salaries tax made in 2000-01 (up to 28 February 2001) is set out in the following paragraphs.

(a) The respective amounts of taxes levied on the assessable profits and income earned in the 1999-2000 year of assessment, after deducting the 1999-2000 provisional taxes levied in 1999-2000, are as follows:

  Tax Type HK$ (in million)  
  Profits Tax 7,100  
  Salaries Tax 4,700  

(b) The respective amounts of 2000-01 provisional taxes are as follows:

The respective amounts of 2000-01 provisional taxes are as follows
  Tax Type HK$ (in million)  
  Profits Tax 34,700  
  Salaries Tax 23,400  

(c) The respective amounts of back taxes levied by Field Audit and Investigation officers of the Inland Revenue Department in respect of past assessment years are:

The respective amounts of back taxes levied by Field Audit and Investigation officers of the Inland Revenue Department in respect of past assessment years are
  Tax Type HK$ (in million)  
  Profits Tax 1,700  
  Salaries Tax 300  

(d) The respective amounts of protective assessments made in respect of cases under investigation by Field Audit and Investigation officers are :

The respective amounts of protective assessments made in respect of cases under investigation by Field Audit and Investigation officers are
  Tax Type HK$ (in million)  
  Profits Tax 960 (note)  
  Salaries Tax 130  

(Note): Out of $960 million, some $560 million are related to two large cases, each of which involves a group of companies where protective assessments were required in respect of different members of the group.

It should be noted that the above figures reflect the Commissioner of Inland Revenue's assessments of profits tax and salaries tax made rather than revenue collected. They do not tally with the 2000-01 revised estimates of $41.2 billion for profits tax and $25.5 billion for salaries tax, which refer to the revenue estimated to be collected in 2000-01. This is because the revenue collected in any year is influenced not only by the assessments made during the year but also by payments of tax assessments in the past years, including arrears. Moreover, part of the tax amount assessed in a year would not be payable until the following year, or even later if in default.

End/Wednesday, April 4, 2001

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