Hong Kong's Top Earners
Hong Kong's top-earning executive paid $45
million in salary tax for the last financial year - $4 million more than the top
earner the previous year.
Figures released yesterday by Inland Revenue
Department revealed the top 10 earners paid between $14 million and $45 million
In 2001-01 the range was $10 million to $41
The department refused to name the
individuals and corporations, citing privacy concerns.
But it is believed the top taxpayer is a
financier who cashed in bonuses or exercised stock options.
This was in a year when Hong Kong suffered
the lowest economic growth for years of just 0.1 per cent. Unemployment also hit
an all-time high of 6.8 per cent.
``The amounts of tax paid by a few taxpayers
were particularly high, probably because they were in receipt of incomes other
than salaries,'' a tax office spokesman said.
``Bonuses, allowances and share-option gains
also form part of the assessable income of a taxpayer.''
Ernst & Young tax services partner Agnes
Chan said: ``Companies will issue stock options to retain the valuable staff.
Top earners might have exercised their stock options, so they are paying more
taxes this year.'' Marcellus Wong, a partner with Andersen, said the higher
taxes reflected strong income carried over from the previous fiscal year,
``[The] economy in the three quarters of 2000
was good and the IT bubble had not yet burst,'' he said.
``If the high-income earners exercised their
stock options and sold the stocks for profit before the bust, they could expect
to pay tens of millions in tax.''
But those who did not sell their stocks in
time might be hit with big tax bills on the book earnings, while suffering
losses as a result of lower stock prices later in 2001.
Hutchison Whampoa Limited group managing
director Canning Fok Kin-ning, who also holds top posts at Cheung Kong
(Holdings) Limited, Hongkong Electric and others, is estimated to have earned
more than $135 million in the 2000-01 financial year, according to Capital,
a Chinese-language monthly business magazine.
While Pacific Century CyberWorks deputy
chairman Francis Yuen made $100 million, George Magnus, deputy chairman of
Cheung Kong (Holdings), as well as deputy chairman of Cheung Kong Infrastructure
and chairman of Hong Kong Electric, came third with an annual income of $78.5
million, the magazine reported.
These top executives' employers may well be
the top 10 profit tax payers, who forked out between $450 million and $1.39
billion. The second highest profit tax payer forked out $1.05 billion.
The top personal salary tax rate is 15
per cent and the corporate profit tax rate is about 16 per cent.
- by Michael Wong & Francis Lee iMail 6 April 2002