| Summary: | 碩士 === 國立政治大學 === 行政管理碩士學程 === 102 === Taiwan’s Economic Performance is not satisfactory for the past few years; meanwhile, government’s total expenditures exceed the tax revenue that it generates. Consequently, it is the research motive to explore the brand-new thinking of public service to develop new scope of taxation by comprehending different taxation systems of other countries in the world. The research purpose is to explore:
1. why most of the countries put the global income tax into practice in the world, Hong Kong is still adopting the schedular income tax.
2. why most of the countries regulate the ratio of direct tax to indirect tax for responding to the change of population structure and avoiding the influence of incentives to work in the world, Hong Kong is still adopting higher percentage of direct tax, and whether which is related to economic growth and which is required to regulate.
The research mainly explore the reasons of adopting the schedular income tax and the relations between the ratio of direct tax to total tax revenue and economic growth by comprehending the background and evolution of income tax, and the change of taxation structures over the years in Hong Kong. Its conclusions are as follows:
1.Geographic and historical variation—Based on inheriting British’s income tax system, Hong Kong has become the important center for international trade and shipping. Hong Kong Inland Revenue Ordinance is based on the taxation system established in the period of British Colony. Besides, Hong Kong is situated at the crossroads of Eurasia and the Pacific, its physical location is convenient to go everywhere in the world; moreover, it is China’s transit trade port because of adjoining Mainland China. As a result, taxation system is as simple as possible to attract foreign capital and promote economic development.
2.Simple and efficient principle—Simple and low-rate tax system.
Hong Kong is a small-sized economic entity. For maintaining competitive advantages, Hong Kong has to persist in the taxation policy of low-rate tax and territoriality principle, and has repealed interest tax, and does not impose capital gains tax and dividend tax. Besides, there are few barriers to capital movement and investment outward and few restrictions on financial and banking industry for Hong Kong to attain a higher position in the international financial center, so it is not necessary to carry out the taxation reform.
3.Economic and fiscal budget policy—Laissez-faire and the principle of keeping the expenditure within the limits of revenues.
As a result of market-oriented, laissez-faire economy, adoption of the fiscal budget policy of prudent financial management and the principle of keeping the expenditure within the limits of revenues, Hong Kong government budget is surplus frequently and its economy is prosperous, and therefore does not have the motive to carry out the taxation reform.
4.Empirical results—The correlation between the ratio of direct tax to total tax revenue and the rate of economic growth is a negative number.
If the ratio of direct tax to total tax revenue increases by 1%, the rate of economic growth decreases by 0.1767%, i.e., the first requisite for sustaining a certain rate of economic growth is decreasing the ratio of direct tax to total tax revenue.
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