Proposed tax on maids is discriminatory

PUBLISHED : Sunday, 15 December, 2002, 12:00am
UPDATED : Sunday, 15 December, 2002, 12:00am

Regarding the proposal from certain political parties to impose a $500 tax to be paid by the employers of overseas domestic helpers, the fact that the proposed tax is to be imposed in conjunction with an equivalent reduction in the salary of helpers indicates clearly that it is a tax on the helpers rather than the employer.

As such it is discriminatory. If the proponents were to suggest a 14 per cent tax on other earners of $3,670 per month in Hong Kong there would probably be public disorder.

It could even be considered as racially discriminatory, as evidenced by the repeated focus by proponents of the proposal on the exchange rate of the Philippine peso against the Hong Kong dollar. Is this the level playing field upon which Hong Kong prides itself?

Ignoring the above issues for a minute, and the flaws in the argument, already pointed out by others, for the use of exchange rate differentials as a guide to purchasing power in the helpers' home countries, one might be willing to accept that the proposal was not intended to be unfair if at the same time it included a suggestion to link helpers' pay generally to charges in the relevant exchange rates (for example, peso, rupiah, baht) against the dollar. Therefore, if the dollar depreciated against the relevant currencies or they appreciated against the dollar, then helpers could expect a pay increase. I do not believe that the proposal contains any suggestion of this kind.

Are the proponents of this proposal seriously advocating that, throughout the commercial sector, at the end of the contracts of their expatriate employees, employers should consider calculating the difference in the exchange rate between the dollar and the currency of those employees' home countries during the contract period and should use this as a basis for negotiating new contract terms? This seems to be a logical extension of their argument.

While I note that the Liberal Party is not the only supporter of this proposal, that party's Web site contains a commentary which attempts to justify the proposal on the further basis that there has been 12 per cent deflation in Hong Kong over the past five years and 12 per cent of $3,670 amounts to $440. However, this analysis fails to acknowledge that the minimum contract wage has already been reduced by around 5 per cent during that period.

I would urge the government to consider very carefully what image of Hong Kong would be presented to the rest of the world if this proposal was implemented.