ABSTRACT
This chapter evaluates the benefits of certain government expenditures as well as the incidence of particular taxes, and allocates them to different income groups. Our investigation of taxation has been confined to direct taxes, excise duties and rates, which together constituted in 1971 roughly 80 per cent of the total tax revenue of the Hong Kong Government. It is all the more significant that this income redistribution towards greater equality has been achieved with a minimum of government intervention and decidedly low tax rates. As information for identifying the relationship between the head and other members of a household is not obtainable from the income distribution table, it is necessary to make some assumptions so as to calculate the amount of tax-exempted income. Direct taxes include essentially salaries and profit tax on individuals and business, interest tax and property tax.
