Persuasive essay
Should sales tax be imposed in Hong Kong?
Written by Liz.L
Sales tax is a state or local-level tax on the retail sale of specified property or services. It is a percentage of the cost of such. Generally, the purchaser pays the tax but the seller collects it as an agent for the government. From 1983 to present, the
imposition of sales tax has been suggested and discussed among Hong Kong citizens .Until now, the Hong Kong government and citizens who have experienced economic recession have not reached a common view on imposing sales tax. It implies that the sales tax — unfavorable to Hong Kong citizens and incapable to solve the economic problems —should not be imposed in Hong Kong.
The sales tax is a regressive tax which helps widen the gap between poor and rich. Since the amount of sales tax is equal to everyone, the proportion of tax to the income of poor is higher than that of rich. Thus, the poor will be impoverished further by the imposition of sales tax.
On the other hand, evasion of sales tax is estimated to be happened inevitably. The Hong Kong government then needs to pay high expense for administration and monitoring. This action does not correspond to the policy of high efficiency and little intervention.
As for the Hong Kong citizens’ willing of consumption, the imposition of sales tax may intensify deflation and slow economic recovery. It is because the imposition of sales tax complicates the transaction process and lessens the citizens’ willing of consumption. In addition, Hong Kong citizens will spend more money on places like mainland China that no sales tax is imposed yet. The retailing and service industry of Hong Kong will then be seriously affected.
Concerning the competitiveness of Hong Kong tourism, Hong Kong is
nicknamed as ‘the shopping paradise’ due to her refusal of imposing sales tax. No imposition of sales tax is the specific characteristic of Hong Kong and it attracts many tourists to boost the Hong Kong tourism. If sales tax really imposes in Hong Kong, the
Hong Kong tourism must be badly affected no matter the drawback system is set.
Some people may be right in saying that the imposition of sales tax can widen the tax base and maintain the income stability of Hong Kong government ;however, what they fail to consider is no inevitable relation exists between widening tax base and stabilizing tax income. In Hong Kong, taxes based on consumption may not be
more stable than taxes based on income. People also ignore that imposing other types of tax, such as progressive salary tax and luxury consumption tax are better than imposing sales tax in widening the tax base of Hong Kong government.
Regarding the phenomenon of aging population, it is true that the implementation of collecting sales tax will not be affected by the aging population. Nevertheless, it might increase the welfare burden of the Hong Kong government and arouse public discontent.
Sales tax has many deficiencies in various aspects, such as social and economic aspects. The effects of imposing sales tax should not be overestimated. After careful consideration and analysis, the sales tax should not be imposed in Hong Kong.
Reference websites:
http://www.answerbag.com/q_view/636864
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