Revenue

The economy in Hong Kong underwent a downward adjustment in 2001, with real growth lower than that of 2000. During the year, there was an increase of $3.9 billion in Earnings and Profits Tax collections, representing a growth of 5% as compared with the previous year (Figure 1, Schedules 1 & 2).However, the sluggish property market coupled with reduced stock market turnover resulted in a decline in stamp duty collections by $2.3 billion.

Overall, revenue collected by the Department during 2001-02 totalled $101.3 billion (about 60% of the Government General Revenue, see Figure 2). This represents an increase of $890 million, or 0.9%, over the amount collected the previous year. The major part of revenue collected came from Profits Tax and Salaries Tax, which together contributed 72% (Figure 3)

Under the "Enhanced Productivity Programme", the Department achieved productivity savings during the year. However, the cost of collection of revenue increased from 1.31% to 1.39% (Figure 4). This was largely attributed to the maturity of high interest-bearing tax reserve certificates sold in 1998-99. Numerous certificates were redeemed in the year, leading to increased interest expenses by over 50%.

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(Last updated/reviewed : January 13, 2003)