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Hong Kong bankers are ok with their tax rise: "It's a bit meh"

If you're a senior banker or hedge fund manager in Hong Kong, you will shortly have less money in your pocket. For the first time in 20 years, Hong Kong has hiked its top tax rate: bankers earning HK$5m ($640k)+ will now be taxed at a minimum of 15%, while anyone earning more than that will be taxed at 16%. 

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Do they care? Seemingly not. The senior bankers we spoke to say the income tax rises are immaterial compared to all their other costs. 

"If you're earning more than $1m, it's a bit meh," says one managing director at a European bank in Hong Kong. "But people are paying multiple times more than this tax rise in rents, and they appreciate that Hong Kong is still a very low tax environment."

The head of trading at another bank agrees that high earners in Hong Kong don't really care much about another 1% on their income tax payments. "It's a non-issue among my peer group," says one. "We were expecting measures to tackle the growing budget deficit."

It helps that income tax rates in Hong Kong are still far below those in Singapore, where the maximum is 24%. Only Dubai, where there is no income tax at all, looks more appealing.  

Instead of discouraging financial services professionals from working in Hong Kong, people there say the income tax rises have provided an opportunity for boasting. "People are just using this to humblebrag about their total compensation being above the threshold," says one managing director.  

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AUTHORSarah Butcher Global Editor

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