銷售稅的咨詢將於 2007 年 4 月結束。請你發表意見, 因為每一個意見都是對最後結果有影響的!!

我反對開徵銷售稅, 因為:

• 徵收銷售稅的社會成本太高
  
• 銷售稅對中至低收入人士有大的負面影響, 但
  
• 對高收入人士只有些微的利益, 同時
  
• 現時的入息及利得稅系統相對更為有效率, 調控這現有的機制亦更能達到所說的擴闊稅基的效果。
  

下面的英文版對以上各點作了一些解釋。

Goods and Services Tax (GST) had stirred up much debate since mid 2006. The public consultation is due in April 2007. So please do shout to the government your opinions. It does count!!

I think GST is a very bad thing, because,

• It is very costly to collect GST
• It affects low income people severely, but only
• benefit high income people slightly, and
• the current tax system, which is relatively more efficient, can already achieve the so-called “broader tax base” effect

Below are explanations, read on if you are interested …

1. The first claim for GST is to “broaden the tax base”. Tax deters growth. If you believe tax is a bad thing, broadening a bad thing will only make that bad thing worse.

2. GST taxes “consumption”. Economic defininition of GDP is Consumption + Investment + Government Expenditure + Net export, and is generally the same as Income + Profits + Some other adjustments. If we tax only Consumption, we are comparatively imposing less “tax effect” on other big items, Investment and Government Expenditure. If we just tax both Income and Profits as what we are currently doing, we actually have a “broader” base than GST!!

3. Remember, “The government undertakes to decrease or eliminate other taxes to make it revenue neutral”. That is if we enforce GST we will, effectively,

• tax Consumption more (affects everyone but high income rank has higher demand elasticity and can choose to be affected less)
• tax Income less (high income rank may have a bigger cut)
• tax Government Expenditure less (so we have to make up that part by taxing more GST …)

Guess who will suffer? The lower income groups. You may have high income and could benefit, but ..

4. If you are in the high income rank, my own rule of thumb is only when your income is higher than one million per year could you benefit. Assuming you earn 1M per year and consume 300K and pay 15K GST per year, only when the income tax is reduced by 1/10 or more could you benefit. There is no guarantee of such reduction at all, because you don’t know how efficient the tax collectors will be … the collection cost may already cut away a high percentage of the collected tax. And this does not take into account the deterring effect of GST to the economy, which may in turn affect your income in the long run. and;

5. Your net benefit came from your higher elasticity of demand compared to lower income groups, or put it simply you can choose to spend less on luxury items than poorer people. But you are still paying more sales tax than poorer people – That is, your income tax savings mostly came from the sales taxes you paid!!

6. GST is administratively costly. Imagine the efforts to collect taxes item by item, establishing a team of people to catch cheaters, subsidize this and penalise that to reach a compromise, etc. etc. It certainly is more costly than purely taxing income of individuals and firms, once per year.

To broaden the tax base, why not just lower the tax exemption level and adjust the progressive tax ranks? And can the administration find some support from the academic circle for this? I bet not. They are politicians.

Another hidden reason could be the slump of the “real big tax”, the land auctions. But as a responsible administration, issues should be set out clearly and sincerely for the public to discuss.

In conclusion, I strongly object to GST.