Chief Executive Donald Tsang Yam-kuen yesterday leapt to the defence of Hong Kong's tax standards, after a row over the city's compliance with global rules threatened to derail the G20 summit.
Mr Tsang pointed out that the government was seeking lawmakers' approval for changes to tax laws this year to allow information to be shared with foreign authorities to crack down on tax evasion - a move already announced in this year's budget.
Hong Kong's tax rules fell under the international spotlight on Thursday amid moves that threatened to see the city declared a tax haven in the G20 final communique. That humiliation was apparently averted after President Hu Jintao refused to countenance the inclusion of a list of tax havens in the communique.
In a compromise brokered by US President Barack Obama, the existence of such a list - compiled by the Organisation for Economic Co-operation and Development - was instead 'noted' in the communiqu?.
Hong Kong and fellow SAR Macau were ultimately not explicitly listed by the OECD as tax havens. Instead, they were mentioned in a fine-print notation as having merely committed to implement internationally agreed tax standards.
'Our tax rate is low, but that does not mean that we harbour irregularities in our system,' Mr Tsang said. 'There has been some concern [in Hong Kong] about disclosure of personal information for tax purposes by other authorities. But this is a matter we have already agreed, to ensure that our policy will become compatible with international practices.'