Revenue

In 2006, Hong Kong's economy continued to expand. IRD collections reached a new high. There was an increase of $3.6 billion in Earnings and Profits Tax collections, representing a growth of 3.2% as compared with the previous year (Figure 1, Schedules 1 and 2). The booming stock market also brought about a 40% increase in total stamp duty collections to $25 billion.
Figure 1 Revenue collected by tax type
2003-04
2004-05
2005-06
2006-07
Type of tax
($m)
($m)
($m)
($m)
 
Profits Tax ––
Corporations
43,666.3
52,562.2
65,586.1
65,499.6
Unincorporated Businesses
5,103.7
6,077.5
4,210.4
6,419.4
Salaries Tax
27,976.9
33,990.5
37,493.9
38,585.6
Property Tax
983.0
1,115.6
1,267.1
1,247.4
Personal Assessment
2,744.4
2,963.4
3,193.9
3,565.6
Total Earnings & Profits Tax
80,474.3
96,709.2
111,751.4
115,317.6
Estate Duty
1,455.3
1,468.4
1,675.7
777.7
Stamp Duty
11,245.4
15,851.4
17,867.2
25,076.6
Betting Duty
11,635.9
12,057.2
11,938.1
12,047.4
Business Registration Fees
1,233.3
1,348.7
1,478.8
1,497.9
Hotel Accommodation Tax
155.6
247.4
310.0
384.2
Total revenue collected
106,199.8
127,682.3
145,021.2
155,101.4
% change over previous year
14.0%
20.2%
13.6%
7.0%


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Overall, revenue collected by the Department during 2006-07 totalled $155.1 billion (close to 70% of the Government General Revenue, see Figure 2). This represents an increase of $10.1 billion or 7%, from that collected in the previous year. The major part of the revenue collected came from Profits Tax and Salaries Tax, which together contributed 71.2% (Figure 3).

Figure 2 Government General Revenue
This is a bar-chart showing Total Government General Revenue for 2003-04 to 2006-07. The figures are as follows: 2003-04 is $295 billion (a transfer of $120 billion from the Land Fund included), 36.0% from IRD collections, 2004-05 is $230 billion, including 55.6% from IRD collections, 2005-06 is $205 billion, including 70.7% from IRD collections, 2006-07 is $229 billion, including 67.7% from IRD collections.

Figure 3 Composition of the revenue collection
This is a pie-chart showing percentage composition of the IRD collections in 2006-07. The figures are as follows: 46.3% from Profits Tax, 24.9% from Salaries Tax, 16.2% from Stamp Duty, 7.8% from Betting Duty, 4.8% from Others.

Figure 4 Cost of collection
This is a line-chart showing cost of collection for 2003-04 to 2006-07. The figures are as follows: 2003-04 is 1.14%, 2004-05 is 0.86%, 2005-06 is 0.74%, 2006-07 is 0.69%.

With continuous cost control and an increase in revenue collections during the year, the cost of collection of revenue decreased from 0.74% to 0.69% (Figure 4).