Happy Chinese New Year!! It’s been a rollercoaster of a week packed full to the brim with work, festivities and delicious local food Unlike most of the rest of the people in Hong Kong around this time, the Lion Rock team was busy at work putting together all the hours of research we had done and coming up with a working draft to meet the tough deadline that had been set the week before. On top of this we made sure we were on track with finishing off all the last minute things that had to be done with respect to the journal that was due to be sent off to the printers so soon. I was able to do some research on the tax system in Hong Kong which I thought would be good to share with readers especially since it is, “the territory’s tradition of simple and low taxes… [that] Is widely seen as a main reason for its stunning rise to prosperity” (The Economist, 2000). Hong Kong was one of the first countries in the world to adopt to a unique form of optional ‘flat tax’ system resulting in a top income tax rate of around 17% for individuals and a flat rate of 16.5% on corporate income. While unincorporated businesses enjoy an even lower rate of 15%. There is no sales tax, GST, capital gains tax, tax on dividends or interest income and no payroll taxes since personal exemptions are so generous, however workers are required to put ~10% of their income into a private retirement account. In the last financial year, tax revenue as a percentage of GDP was only around 13% compared to a whopping 30.8% in Australia. What makes the tax system work so well is it’s innate simplicity with the entire ‘Inland Revenue Ordinance’ comprising of around 200 pages setting out the entire substantive as well as the entire machinery for it’s administration etc. Furthermore, the few decisions of the courts as to the correct interpretation of the Ordinance have been few in number and have always been respectful of taxpayers’ rights. The tax regime really should be admired as being a contributing factor to Hong Kong’s prosperity where entrepreneurs, workers and other participants are not being penalized in creating wealth.
All of the rush in the office this week was mainly attributable to the fact that the first, second and third day of the Lunar New Year were public holidays which left less than half of a week of productive work to be had. Nevertheless, we achieved most of what we had set out which was great news.
Lunar New Year’s Day was on the 3rd of February. You know it’s Chinese New Year when all of Hong Kong’s shops pull down their shutters and the city becomes even more crowded than it usually is with an influx of mainlanders who come to celebrate on the streets that are littered with red ribbons (red symbolizing good luck and believed to ward off evil spirits) and small mandarin orange trees that are considered traditional symbols of abundance and good fortune. It wasn’t hard to see that Chinese New Year is one of the most celebrated festivals in Hong Kongand it was interesting to see how many parallels could be drawn to the western celebration of Christmas with the frenzied gift giving and familial traditions and customs that were highlighted. I had the opportunity to visit a few of the temples and shrines in the inner city that were just packed with people who were finding the time to drop in and light an incense joss stick which is a medium for sending prayers to local deities to bring luck for the year ahead. I spent the afternoon around Salisbury gardens and Kowloon Public Pier in TsimTsamShui and amidst all the celebration was even able to witness a public demonstration on the persecution of the Falun Gong by the administration in mainland China which was interesting but confronting and seemed so out of place in a day full of such festivities. At night, the Victoria harbor-front area was transformed into a giant street party with a huge CNY Night parade sponsored by Cathay Pacific which was full of illuminated floats and vibrant performing groups but what really provided me with the most memorable start to the Year of the Rabbit was celebrating CNY with a local Chinese family from the Institute. I was literally showered with Red Lai See envelopes which are the traditional gifts given during CNY usually from a senior to a junior and are believed to bring both prosperity and good luck to both the giver and recipient. The Chinese invented fireworks around the 12th century as a way of scaring away evil spirits and it’s no surprise that the fireworks I witnessed on the Second night of the New Year was, without a doubt one of the biggest spectacles I’ve witnessed in the sky and even though the entire area of Victoria harbor front was packed with thousands of people; once the fireworks began everyone had front row seats.
Instead of visiting Macau like I had planned, I ended up cancelling the ferry tickets I had purchased and decided to visit the Peak with friends since it was such a clear day (which is pretty rare in HK) so we thought itwould be better to not miss out on the visit to the peak during the day and really be able to enjoy truly magnificent views before us. The pictures I’ve included from the Peak speak for themselves.
All these festivities have certainly recharged my batteries and have made me long to get back into some challenging work and research with the Institute.