LCQ15: Promoting flow of manpower in Guangdong-Hong Kong-Macao Greater Bay Area
17.5.2023

Following is a question by the Hon Shiu Ka-fai and a written reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (May 17): Question: Some members of the community consider that the continuous decrease in the number of individuals tax returns issued by the Inland Revenue Department (IRD) in recent years reflects that Hong Kong's labour population and labour force are on a continuous decline. On promoting the flow of manpower in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), will the Government inform this Council: (1) of the number of individuals tax returns issued, the actual number of taxpayers, and the revenue from salaries tax in each of the past five years of assessment, with a tabulated breakdown by gender and age group of taxpayers; (2) as the IRD explained earlier on that the drop in the number of individuals tax returns issued might involve various reasons, including that some taxpayers did not need to pay tax for several consecutive years, and that some people fell outside the tax net because their income dropped as a result of the impact of the economy and they benefitted from tax concession measures, of the number of people who had employment income but were not issued with tax returns in each of the past five years of assessment, with a tabulated breakdown by reason for not being issued with tax returns; and (3) whether it has studied whether the continuous decrease in the number of individuals who need to file tax returns is related to the continuous decline in the labour population; if it has studied and the outcome is in the affirmative, whether the Government will discuss with the Mainland authorities the promotion of the flow of manpower in the GBA to replenish Hong Kong's labour force; if so, of the details; if not, the reasons for that? Reply: President, In respect of the question raised by the Hon Shiu Ka-fai, having consulted the Labour and Welfare Bureau (LWB) as well as the Inland Revenue Department (IRD), the reply is as follows: (1) and (2) A breakdown of the numbers of Tax Returns &ndash; Individuals issued and the numbers of taxpayers under salaries tax in the past five years of assessment by gender is tabulated as follows: Year of assessment Number of Tax Returns &ndash; Individuals issued (million) Number of taxpayers before tax reduction (million) Number of taxpayers after tax reduction (million) 2017/18 2.95 1.87 1.87 Maleï¼1.01 Maleï¼1.01 Femaleï¼0.86 Femaleï¼0.86 2018/19 3.00 1.84 0.65 Maleï¼0.98 Maleï¼0.37 Femaleï¼0.86 Femaleï¼0.28 2019/20 2.94 1.91 0.72 Maleï¼1.02 Maleï¼0.41 Femaleï¼0.89 Femaleï¼0.31 2020/21 2.83 1.82 0.91 Maleï¼0.97 Maleï¼0.51 Femaleï¼0.85 Femaleï¼0.40 2021/22 2.70 1.81 0.95 Maleï¼0.97 Maleï¼0.54 Femaleï¼0.84 Femaleï¼0.41 Revenue from salaries tax is generally recorded in financial years. The revenue from salaries tax in the past five financial years is as follows: Financial Year Revenue from salaries tax ($million) 2018-19 60,146 2019-20 50,412 2020-21 75,027 2021-22 75,570 2022-23 (provisional) 79,490 Taxpayers are not required to furnish information about their age in their individual tax returns as salaries tax assessments made by the IRD would not be affected by the age of taxpayers. Hence, the IRD is unable to compile statistics on salaries tax with breakdown by taxpayers' age. The IRD does not have statistics or analysis on the number of persons who have not been issued tax returns and the reasons therefor. (3) IRD noted that there were many reasons for the decrease in the number of Tax Returns - Individuals issued in bulk, including the following: some salaries taxpayers might have fallen out of the tax net because their incomes had reduced due to global and local economic conditions; others with low or middle income did not need to pay tax as they benefited from the 100 per cent tax reduction; and some taxpayers did not have income sourced in or derived from Hong Kong due to various reasons, etc. In strengthening talents exchange and co-operation, the Government launched a series of proactive measures to attract talents at the end of last year. In the aggregated list of the world's top 100 universities under the newly launched Top Talent Pass Scheme co-ordinated by the LWB, there are a total of nine Mainland universities, including the Sun Yat-sen University located within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). Graduates of these universities, whether located in the GBA or not, may come to Hong Kong through the scheme for work or to explore opportunities. The Immigration Arrangements for Non-local Graduates is also extended on a pilot basis to cover graduates of the campuses of Hong Kong's higher education institutions in the Mainland cities of the GBA, so as to attract outstanding talents from these institutions to come to Hong Kong for employment. The Government will continue to enhance Hong Kong's role as a gateway to the GBA and overseas talents, and will explore with the Guangdong Provincial Government to strengthen co-operation in various aspects, with a view to speeding up the development of a talent cluster in the GBA and promoting high quality growth at both regional and national levels.