A Study On Introduction Of Goods And Services Tax In Hong Kong Special Administration Region

Hong Kong Special Administration Region is an amusing place. Without natural resources, a small island could develope as one of the importance metropolitan in the world. The great success of Hong Kong could attribute to its simple and low taxation strategy that not only helps to attract foreign investments to boost it development, but also offer a best return to hard-working people. However, persistent budget deficits, commodity deflation and economic recession after Asia Financial Crisis disclosed its narrow tax base system is vulnerable to economic changes. There is no doubt that narrow tax base is unable to offer a stable income for sustainable development in Hong Kong.Since Hong Kong remains one of the few countries in the PRC and South East Asia that does not impose a tax on the consumption of goods and service, I will explore the necessity of introducting Goods and Services Tax (GST) in Hong Kong in this article. In addition, I will make a simple evaluation on the GST proposal announced by Hong Kong SAR Government.