Stabilization of government revenue: Advance payment of taxes enables the collection of the expected tax revenue for the government in the fiscal year in advance, which helps to stabilize government revenue, reduce income fluctuations, and ensure that the government has sufficient resources for planning and implementing policies.
Increased accuracy of financial planning: Through the collection of advance payment of taxes, the Hong Kong Inland Revenue Department can more accurately predict future tax revenue, thereby increasing the accuracy of financial planning. This helps to ensure that the government can make decisions based on accurate data when allocating resources and implementing fiscal policies.
Alleviation of taxpayers' burden: The advance payment of taxes system usually allows taxpayers to pay their taxes in installments, which helps to reduce the burden of paying a large sum of taxes at once. In addition, the advance payment of taxes system also helps to reduce the risk of late payment of taxes by taxpayers and the possibility of tax arrears.
Improvement of tax compliance: The advance payment of taxes system can improve taxpayers' compliance because they can more easily pay their taxes throughout the year instead of paying them all at once at the end of the year. This helps to reduce tax evasion and late payment, thereby increasing the government's tax revenue.
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