5% sales tax that would raise HKD3.8bio per annum.
Why the drop?
Politically inconvenience. Sadly it reflects very poor planning.
What is the current budget situation in HK?
1. About 1/3 of income earners pay tax. Very narrow tax base.
2. They have been living admist budget deficits.
I wonder how have they been funding their budgets year in year out.
More land sales? How much more land you can sell?
More Disneylands? Oops.. that is certainly a costly exercise.
- More "sin" taxes ie. on cigarettes and liquors. Maybe it is a good outcome afterall.
- Capital gains tax - very painful for Hong Kongers as "buying and selling" is a favourite past time activity there.
- More taxes on car - another possible good outcome of no sales tax - it would help with the smog.