Dr. Hon. Lam Tai Fai, our School Supervisor, expresses his concern over the Double Taxation Agreement between Hong Kong and Mainland China 打通穴道放寬183天界線 on Wednesday, 18-11-2009
Dr. Hon. Lam Tai Fai was a big fan of Wuxia Novels, especially the characters created by the known wuxia novelist, Jin Yong (金庸). In the fantasy world of wuxia, no matter how powerful the masters are, they first have to get through the Ren an Du Meridians (任督二脈), otherwise they will not be able to proceed onto a higher level of mastery.
Dr. Lam compares the wuxia practice with implementation of government strategies --- in order to promote a policy effectively, a well-organized plan with distinct direction seems crucial.
In face of the extremely keen global competition, if Hong Kong wishes to sharpen her competitive edges, capitalizing the opportunity created by the economic integration between Hong Kong and Guangdong is the key. However, in the current agreement between Hong Kong and Mainland China, when a Hong Kong resident stays over 183 days in mainland, he/she is required to pay income tax to Mainland government according to number of days one has spent there. Since the tax rate in Mainland is higher than that of Hong Kong, it certainly becomes a financial burden for those people who have to work and travel across the border frequently.
Also, according to a statistics, there is a steady growth of traffic across the border by 4.4% each year. This continuous increase has revealed the sure need to revise the taxation agreement so as to cope with this rising trend. Since Hong Kong is part of China, Dr Lam suggests that the minimum period of stay can be extended to 260 days per year, which is beneficial to the ever-growing flow in terms of people as well as the most precious integration between Hong Kong and the Mainland, and also the economic development in both places.
Question for discussion:
- How far do you think the Double Taxation Agreement (DTA) will affect the flow and economic activities between Hong Kong and the Mainland?