Ahhh, just received my tax forms from the Hong Kong Inland Revenue Department. Yuk. If there is anything more depressing than paying taxes, it's paying taxes twice.
This time will be particularly painful for me because I will be paying for two years' worth of taxes (2012 AND 2013) all in one go. It works this way because I moved here in the middle of the previous tax assessment. In Hong Kong, you pay all of your prospective taxes for the upcoming year in one lump sum (and then there is a true-up later that year to make sure the previous estimate was correct).
This is a system that makes you really FEEL the money you are forking over to the government. Coming from the U.S., where taxes are pulled out per paycheck before one even receives the net amount, I knew I paid a ton in taxes but the psychological effect was not so bad. Now, I am bracing myself for tens upon tens of thousands of dollars to fly out of my account in one fell stroke.
Here, citizens know that they have to save the better part of 15% of their total income each year to make the prospective payment. For those who have not set aside enough to make their payment, banks provide "tax payment" loans specifically for this purpose. ...Needless to say, those rates are not all that attractive.
In a perverse way, I like this system because it makes you more aware of your civic obligations. Observing the low rates of savings in the U.S., however, I can see why the U.S. federal government has not yet adopted this system!
This time will be particularly painful for me because I will be paying for two years' worth of taxes (2012 AND 2013) all in one go. It works this way because I moved here in the middle of the previous tax assessment. In Hong Kong, you pay all of your prospective taxes for the upcoming year in one lump sum (and then there is a true-up later that year to make sure the previous estimate was correct).
This is a system that makes you really FEEL the money you are forking over to the government. Coming from the U.S., where taxes are pulled out per paycheck before one even receives the net amount, I knew I paid a ton in taxes but the psychological effect was not so bad. Now, I am bracing myself for tens upon tens of thousands of dollars to fly out of my account in one fell stroke.
Here, citizens know that they have to save the better part of 15% of their total income each year to make the prospective payment. For those who have not set aside enough to make their payment, banks provide "tax payment" loans specifically for this purpose. ...Needless to say, those rates are not all that attractive.
In a perverse way, I like this system because it makes you more aware of your civic obligations. Observing the low rates of savings in the U.S., however, I can see why the U.S. federal government has not yet adopted this system!
No comments:
Post a Comment