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Public Finance HKSAR

Public Finance HKSAR. Public Finance. Public finance means how the government raises funds and spends the money on various kinds of services for the economy. What is public finance?. So public finance is concerned with. The revenue and expenditure of the government .

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Public Finance HKSAR

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  1. Public Finance HKSAR CE Public Finance

  2. Public Finance Public finance means how the government raises funds and spends the money on various kinds of services for the economy. What is public finance? CE Public Finance

  3. So public finance is concerned with The revenue and expenditure of the government CE Public Finance

  4. The government is referred to as the public sector CE Public Finance

  5. The size of the public sector is measured by the amount of public expenditure ( 100% ) GDP CE Public Finance

  6. Public expenditure as % of GDP of the HKSAR CE Public Finance

  7. Sources of government revenue • tax • non-tax CE Public Finance

  8. Classification of taxes CE Public Finance

  9. According to the party who bears the tax burden, taxes can be classified into: ________ taxes and ________ taxes According to how the tax payment changes with income, taxes can be classified into: __________, ____________ and __________ taxes Classification of taxes direct indirect proportional progressive regressive CE Public Finance

  10. Direct tax Indirect tax Tax revenue ( 1 ) CE Public Finance

  11. is a tax on income or wealth. the tax incidence or burden CANNOT be shifted. the tax rate is either progressive or proportional Examples in Hong Kong salaries tax profit tax property tax estate duty interest tax ? dividend tax? Direct tax CE Public Finance

  12. is a tax on goods and services the tax incidence or burden CAN be shifted ( usually to the consumers, depending on the elasticity of demand and supply ) the tax rate is regressive Examples in H.K. cigarettes tax; stamp duty; general rates; vehicle import tax; airport departure tax; tax on alcoholic liquor; hotel accommodation tax; entertainment tax; betting tax and etc. Indirect tax CE Public Finance

  13. Classify the above Hong Kong taxes into direct and indirect taxes. Quiz 1       CE Public Finance

  14. Tax Revenue ( 2 ) • Progressive tax; • Proportional tax; and • Regressive tax CE Public Finance

  15. rogressive tax: Tax payment takes ____________________ of taxable income as income increases. roportional tax: Tax payment takes ____________________ of taxable income as income increases. egressive tax: Tax payment takes ____________________ of taxable income as income increases. Progressive, proportional and regressive taxes an increasing percentage the same percentage a decreasing percentage CE Public Finance

  16. Fill in the blanks of average tax rate ! Progressive, proportional and regressive taxes A, B and C are three types of tax: 10% 7.5% 6.7% 7.5% 8% 8% CE Public Finance

  17. Which type of tax is a progressive tax? Progressive, proportional and regressive taxes A, B and C are three types of tax: 10% 7.5% 6.7% 7.5% 8% 8% CE Public Finance

  18. Which type of tax is a regressive tax? Progressive, proportional and regressive taxes A, B and C are three types of tax: 10% 7.5% 6.7% 7.5% 8% 8% CE Public Finance

  19. Which type of tax is a proportional tax? Progressive, proportional and regressive taxes A, B and C are three types of tax: 10% 7.5% 6.7% 7.5% 8% 8% CE Public Finance

  20. Suppose the government levies a tax of $10 on all passengers who depart HK by sea. What type of tax ( progressive / proportional / regressive ) is it? It is a _________ tax. Since all passengers pay the same amount of tax, tax payment takes a _______ proportion of income for the higher income group. Quiz 2 regressive smaller CE Public Finance

  21. When the tax payment increases as the income increases, is it a progressive tax ? ____. Quiz 3 No A tax is progressive if the tax payments takes an increasing percentageof taxable income as income increases. CE Public Finance

  22. e.g. Quiz 3 When the tax payment increases as the income increases, is it a progressive tax ? 10% 8% Fill in the average tax rates ! CE Public Finance

  23. e.g. Quiz 3 When the tax payment increases as the income increases, is it a progressive tax ? 10% 8% The tax payment increases as the income increases, but it is a _________ tax. regressive CE Public Finance

  24. Non-tax revenue • Examples: sale of land; fines and penalty; government fees and etc. CE Public Finance

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