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The Macao SAR government on June 3 introduced the revised supplementary income tax (SIT) system, designed to reduce the financial burden of small-and medium-sized enterprises (SMEs) and improve their business environment.
Under the SIT regime, one-third of Macao's SMEs will be exempt from the tax, while 2,700 of them will pay 25 per cent to 50 per cent less tax and 17,000 will have their tax burden slashed by more than 50 per cent.
Analysts were quick to applaud the government's latest move, saying the new tax regime would help attract more overseas investors and give non-profiting enterprises a better chance to survive and rebound.
Assistant Professor of Macao Polytechnic Institute's Public Administration Programme Sunny Chan said Macao's new tax system was very attractive and quite daring, considering that not even Hong Kong and Singapore had gone that far to help the struggling SMEs.
Macao Society of Accountants president Leong Kam-chun, too, praised the SIT system as a well-rounded tax discount package that would make all tax-paying business owners happy.
Leong said the latest government move was a follow-up to last year's cuts on salary tax to narrow the gap between tax burdens of employers and employees.
But he warned the government against offering more such tax reductions because Macao's tax rates were already among the lowest in the region. It would be more beneficial to Macao's long-term growth if the authorities keep the tax system and revenue basis stable, he said.
(China Daily June 6, 2005)
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