Collection
 
 
Revenue collected by the Department includes tax, additional tax, surcharge and fines. Schedules 16 and 17 provide details of additional tax, surcharge and fines imposed by the Department in respect of Earnings and Profits Tax during 2004-05.
 
 
Collection of tax
 
There are various payment methods by which a taxpayer can choose to settle a tax liability. Figure 28 shows the payment methods used by taxpayers in 2004-05. Electronic payments (by phone, bank ATM or the Internet) are gaining popularity. For Earnings and Profits Tax, 56% of the payment transactions made during the year were through electronic means.
 
   
 
Earnings & Profits Tax
 
Number of transaction
Amount ($m)
This is a bar-chart showing analysis of payment transactions for Earnings & Profits Tax by payment methods for 2003-04 and 2004-05. The figures are as follows: In 2003-04, the number of transaction is 2,144,436, 11% paid by ATM, 21% by phone, 20% via Internet, 33% in person and 15% by post, In 2004-05, the number of transaction is 2,239,049, 11% paid by ATM, 18% by phone, 27% via Internet, 32% in person and 12% by post.
This is a bar-chart showing analysis of collections from Earnings & Profits Tax by payment methods for 2003-04 and 2004-05. The figures are as follows: In 2003-04, total collections are $80,474.3 million, 3% paid by ATM, 4% by phone, 17% via Internet, 58% in person and 18% by post, In 2004-05, total collections are $96,709.2 million, 3% paid by ATM, 3% by phone, 20% via Internet, 57% in person and 17% by post.
 
Total Revenue (including other duties)
 
Number of transaction
Amount ($m)
This is a bar-chart showing analysis of payment transactions for total IRD collections (including other duties) for 2003-04 and 2004-05. The figures are as follows: In 2003-04, the number of transaction is 3,571,128, 7% paid by ATM, 13% by phone, 14% via Internet, 53% in person and 13% by post, In 2004-05, the number of transaction is 3,723,841, 7% paid by ATM, 11% by phone, 17% via Internet, 54% in person and 11% by post.
This is a bar-chart showing analysis of total IRD collections (including other duties) by payment methods for 2003-04 and 2004-05. The figures are as follows: In 2003-04, total collections are $106,199.8 million, 2% paid by ATM, 3% by phone, 13% via Internet, 57% in person and 25% by post, In 2004-05, total collections are $127,682.3 million, 2% paid by ATM, 3% by phone, 15% via Internet, 57% in person and 23% by post.
 
 
Refund of tax
 

Refunds were made to taxpayers for various reasons, such as overpayment of tax or refund arising from a revision of an assessment. They were issued as expeditiously as possible. During 2004-05, tax refunds totalling $5.2 billion were made (Figure 29).

 

 

 
  2003-04* 2004-05
Type of Tax
Number
Amount ($m)
Number
Amount ($m)
Profits Tax 24,633 2,785.1 24,760 2,313.3
Salaries Tax 1,452,148 3,382.7 297,797 1,476.9
Property Tax 13,568 102.5 14,541 95.9
Personal Assessment 132,817 325.8 23,215 193.0
Others 14,092
 2,285.1
 13,915
 1,133.0
Total 1,637,258
 8,881.2
 374,228
 5,212.1
* Including 1.25 million refund cases processed under the tax rebate exercise in July 2003
 
 
Recovery of tax in default
 

Taxpayers should pay tax on or before the due date shown on the demand notes issued to them. The vast majority of taxpayers settle their tax liabilities in a timely manner.

A late payment surcharge of 5% will generally be imposed where tax is in default. If tax debts remain outstanding for more than six months after the due date, the Department may impose a further surcharge of 10% on the total unpaid amount.

 
Any tax in default is immediately recoverable. Recovery notices can be issued to third parties (including employers, bankers and other parties owing money to or holding money on behalf of the defaulting taxpayers) to effect collection. Actions may also be commenced in the District Court. Figure 30 summarises the recovery actions taken by the Department. Upon entry of judgment, a defaulting taxpayer becomes liable to legal costs and interest on judgment debt for the period from the date of commencement of proceedings to the date of full settlement in addition to the outstanding tax. Figure 31 shows the legal costs and judgment interest collected during 2004-05.
 
 
Recovery notices
 
Number of notices
Tax involved
This is a bar-chart showing number of recovery notices issued for 2001-02 to 2004-05. The figures are as follows: 2001-02 is 121,852, 2002-03 is 98,664, 2003-04 is 89,047, 2004-05 is 100,558.
This is a line-chart showing tax involved for recovery notices issued for 2001-02 to 2004-05. The figures are as follows: 2001-02 is $4,491 million, 2002-03 is $4,642 million, 2003-04 is $4,857 million, 2004-05 is $4,991 million.
 
Recovery action in the District Court
 
Number of cases
Tax involved
This is a bar-chart showing number of recovery actions in the District Court for 2001-02 to 2004-05. The figures are as follows: 2001-02 is 11,638, 2002-03 is 10,395, 2003-04 is 11,047, 2004-05 is 12,078.
This is a line-chart showing tax involved for recovery actions in the District Court for 2001-02 to 2004-05. The figures are as follows: 2001-02 is $754 million, 2002-03 is $918 million, 2003-04 is $875 million, 2004-05 is $856 million.
 
   
 
 
 $
 $
Court Cost Court Fees
2,781,854
  
Execution Fees
82,552
2,864,406
Fixed Cost  
1,159,007
Judgment Interest Pre-judgment Interest
5,785,484
  
Post-judgment Interest
16,522,762
22,308,246
Total costs and interest collected
26,331,659
 
A person with tax in default may be prevented from leaving Hong Kong. This, however, requires the Commissioner to satisfy a District Judge that there are reasonable grounds for believing that the person intends to depart, or has departed, from Hong Kong to reside elsewhere without paying his tax or furnishing adequate security for payment of such tax. The relevant legislation also provides that the person concerned may appeal to the Court of First Instance against a District Judge's decision.