While we may still have a competitive edge over these places insofar as the standard tax rate is concerned, there is no room for complacency. Obviously we want to ensure that Hong Kong continues to be a premier international business and financial centre in the region. We therefore need to consider whether our competitive edge is still enough or whether changes elsewhere in the region have eroded it to the point that we have to respond and take appropriate action. We should aim to send the right signal to investors and the international business community that Hong Kong remains the best place where they can do profitable business. Profits tax as a revenue source 6.
Profits tax is our largest revenue source.
It is also a stable revenue source. No adjustment to the profits tax system should affect profits tax as a stable and productive revenue source. We have to maintain a stable tax base. Our simple and predictable tax regime offers certainty to investors. Our tax legislation is not complicated, and, where necessary, we supplement it with clarification in the form of practice notes.