Accessibility links

Breaking News
News

Hong Kong Considers New Goods, Services Tax

update

Hong Kong is considering a new goods-and-services tax, and an Indian software-services giant sees profit exceed expectations as it attracts dozens more overseas clients.

Hong Kong's government has opened public discussion on plans for a goods-and-services tax. Government officials say the tax on sales is the most attractive way to stabilize tax revenue and meet public spending needs.

David O'Rear, chief economist at the Hong Kong General Chamber of Commerce, says the levy is a good option, one that most of the world's major economies already use.

"Particularly as we look over the long term, consumption taxes are some of the simplest and easiest and cheapest to collect, they're highly stable, and they're common to about 137 or 138 tax jurisdictions around the world, so there's certainly nothing excitingly new about this," he said.

The government suggests cutting taxes on salaries and giving low-income families extra aid to help ease the effect of the new tax. Tourists also would get refunds on any tax they pay while shopping - a moved intended to keep Hong Kong competitive with other tourism destinations.

Indian information technology company Tata Consultancy Services reported a 33 percent jump in net profit during its fiscal first-quarter. Tata says profit for the April-to-June period was more than $180 million, on revenue of about $900 million.

Tata says growth has been driven by strong volume in outsourcing orders, and that it added 62 new clients and more than 7,000 employees during the quarter.

Another sign the Japanese economy is on the upswing after the central bank raised interest rates - a private research firm says corporate bankruptcies were down six percent in June compared with last year. The Teikoku Databank says debt left by failing businesses fell almost 13 percent, to $3.3 billion last month, its lowest level in 12 years.

The drop is attributed in part to fewer failures in the manufacturing sector, while the construction and service sectors accounted for the greatest number of cases.

Hyundai Motor Company, South Korea's largest automaker, says a labor strike has cost the company more than $1 billion in production losses and forced it to suspend vehicle exports.

The company says production has fallen by more than 70,000 vehicles, or between 80 and 90 percent of normal output, since the strike began June 26. The company says overseas dealers will not be affected for the time being, as it has already shipped enough inventory for about three months. Hyundai workers are demanding higher wages and better working conditions.

XS
SM
MD
LG