Last month, the tax bureau issued the results list for 2023/24, which is also the "sad list" for taxpayers. Overall tax revenue was 342 billion dollars, down 5% year-on-year, but this was mainly due to a decrease in stamp duty and only a slight decrease in profits tax. In contrast, salaries tax revenue increased by 0.5%. Among the series of numbers, there are two points worth paying attention to:
1. Personal tax returns: 2.44 million personal tax returns were issued in 2023/24, an increase of 40,000 from the previous year; the number of people with an annual salary of more than 900,000 increased by 10%, and the number of employees and wage income increased, showing the tight labor market and wage costs The upward trend runs counter to the overall economic downturn and is unfavorable to Hong Kong's business environment.
2. Tax collection situation: Merchants are more concerned about tax collection situation. According to figures provided by the tax bureau (see table below), 1,802 recovery cases were completed, maintaining the highest level and rising for five consecutive years. For each investigation case, the final tax and fine recovered amounted to an average of 1.8 million dollars, a significant increase of 28% from the 1.4 million dollars in the previous year. From the fact that the number of investigation cases has remained at the highest level and the number of tax recoveries in each case has increased significantly, it can be seen that the rumors in the market that the government is poor and wants to increase the number of investigation cases to recover taxes are not unfounded. In fact, the number of cases our company has received from new customers requesting assistance in handling tax investigations has increased significantly in the past two years, which shows that the tax bureau has adopted a more aggressive approach to tax inspections.
The best way to avoid being audited by the tax bureau, resulting in overpayment of taxes and fines, is of course to file a tax return every year, including preparing appropriate accounting records, expense receipts, and accurately calculating the tax payable, etc. The ideal thing is to pass it smoothly, without the tax bureau asking questions, but if you encounter questions from the tax bureau, you can answer them as quickly as possible; instead of filing taxes randomly or making false tax returns.
Our company has many years of experience in handling different types of tax cases and tax investigations. If you have any tax issues, please feel free to contact our company.
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