Hong Kong's tax revenue rose to a record HK$238.3 billion in the 2011-2012 financial year, spurred by profits and wage tax gains.
That was an increase of 14 per cent from the previous record in the preceding year.
The taxman collected HK$118.6 billion in profits tax, up 27 per cent from the year earlier, while wage tax rose 17 per cent to HK$51.8 billion.
'These increases were because of a good economic performance in the first half of last year, and they were mainly generated by a small number of firms earning high profits and a small group of high-income individuals,' said Chu Yam-yuen, commissioner of the Inland Revenue Department (IRD).
Owing to the city's narrow tax base, the highest-earning 200,000 individuals paid 80 per cent of the income tax. And just 10 per cent of roughly 91,000 firms had to pay profits tax.
However, stamp duty revenue fell 13 per cent to HK$44.4 billion due to fewer transactions in the stock and property markets after August because of the global economic jitters.
On the issue of whether the incoming government should review the tax system, Chu said his department had conducted two studies on broadening the tax base but there was no consensus in society.
As part of the government's move to curb property speculation, a special stamp duty - levied on 225 transactions - collected HK$51.5 million since its introduction in November 2010.
The stamp duty levies 15 per cent on the sale value of properties resold within six months of their purchase, 10 per cent for those sold within a year and 5 per cent for those within two years.
Since it was introduced, up to about 20 transactions a month were slugged with it. The number of such transactions surged to 108 in March.
Was the tariff's impact declining? 'We don't know why there was a surge,' Chu said. 'But it is said that there is a short-lived boom in the property market. We need to look further.'
Chu also said there was evidence to suggest that the special stamp duty had achieved its aim.
Before its introduction there were 320 confirmor sales a month on average. They are deals in which properties are resold by buyers before completing their purchase.
After the stamp duty's enactment, monthly confirmor sales fell to an average of 74 transactions last year, and 29 in the past three months.
But while the stamp duty had curbed property speculation, real estate prices kept rising due to low interest rates and inflation, said Eddie Hui Chi-man, a building and real estate professor at Polytechnic University.
Patrick Chow Moon-kit, Ricacorp Properties' head of research, said the surge of sales in March subject to the stamp duty was due to profit-taking by investors who had held the properties long enough to qualify for the 5 per cent tariff.
In the area of tax evasion, the taxman collected HK$6 billion in back taxes and penalties from various cases, some of which went back as far as a decade.
The amount of tax, in HK dollars, 10 firms each avoided paying by falsifying tax-deductible interest expenses for subsidiaries