Hong Kong: Low Tax and Status of International Financial Centre Guaranteed

Maintenance of the low tax regime and the status of international financial centre under Basic Law
Articles 7, 106, 107 and 108 of the Basic Law laid down the fundamental principles regarding the fiscal
system of the Hong Kong SAR, inter alia, that Hong Kong SAR shall have independent finances and the
financial revenues and shall be used exclusively for its own purposes; and also the principle of keeping
expenditure within the limits of revenues in drawing up budgets.
Article 108 provides that Hong Kong SAR shall practise an independent taxation system and, taking the
low tax policy previously pursued in Hong Kong as reference, enact laws on its own concerning types of
taxes, tax rates, tax reductions, allowances and exemptions, and other matters of taxation.
Article 109 also provides that the Government of the Hong Kong Special Administrative Region shall
provide an appropriate economic and legal environment for the maintenance of the status of Hong Kong as
an international financial centre.

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