Research On Feasibility Of Self-assessment For Profits Tax In Hong Kong

Over the year 1997, the major revenue of Government of Hong Kong Special Administration Region relied on a limited range of tax and land selling. In times of economic downturn previously, the government stopped to sell the crown land to the developers which aimed at reducing the supply, and stabilize the price of flats. Even though the government has recently let the developers to buy the land by auction, but it cannot recover to the day before the year 1997. On the other hand, it fails to introduce a "Goods and Services Tax" to broader the tax base, as such, the existing tax revenue become more important, so as the vital tax source - Profits Tax. Hence the Inland Revenue Department needs to have a reliable and efficient tax revenue administration system to protect the government's wealth.However, the rapid growth of the number of new companies over the past few years, it makes the problem looks serious. Additionally, in prior years, the government attempted to encounter the fiscal deficit by reducing the number of civil servants. All of them make the matters even worse than before. As such, the existing "Assess first, Audit later" and "Review" tax administration system can only release the workload temporarily. Moreover, there are some defects for the aforesaid systems, the tax evasion is easy and common, especially in "Review" system, tax revenue was irrecoverable as it was hide by the taxpayers unless they become solvent. As such, they cannot entirely solve the problem in the long term. It needs to introduce a new tax administration system in Hong Kong. Consequently, the research on feasibility of self-assessment for profits tax in Hong Kong is inevitable.