We agree that Hong Kong should impose general sales tax with sales tax system adjusted. Firstly, the government can refer to the weight of CPIs to define luxuries, and impose with higher sales tax rate on them than necessities. So, the higher-income group bears higher tax rate. And the wealth gap may be widened in a smaller extent.

Secondly, sales tax should be imposed on consumer goods. So, the administrative cost of enterpr ises are minimised. Therefore, the upward shifting of SRAS curve and the increase in price level will be in a smaller extent.

Thirdly, profits tax rate should be reduced to attract foreign investment.

It may offset the disincentive effects on investment. Also, financial services are excluded to maintain Hong Kong’s competitiveness.

Fourthly, most administrative costs are one-time cost as proved by the charge in administrative cost over the sales tax revenue in Australia. Therefore, the cost-effectiveness is still high.

Lastly, sales tax rate should be lower than our nearby countries and tax rebate should be offered to tourists. Therefore, tourists will still visit Hong Kong where prices are reasonable and qualities are guaranteed.

It will be more easily to introduce sales tax when the economy is in recovery with

low unemployment rate, steady growth of real GDP. Therefore it is good for Hong Kong to impose sales tax now!

Wealth gap would be widenedSales tax is a regressive tax, of which

average tax rate decreases when income increases. So wealth gap will be widened.

Singapore raised its sales tax from 3% to 4% in 2003 and to 7% in 2007. Its Gini Coefficient rose from 0.450 in 2003 to 0.471 in 2007. It shows that sales tax worsens income disparity.

Higher cost of livingAs the unemployment rate of Hong

Kong (3.1%) is close to the natural rate of unemployment (2.5%), it is assumed Hong Kong is now at full-employment level. Imposing a sales tax will increase the administrative costs and cost of production of corporations. So, SRAS will decrease, the price level will increase. Consumers may bear those additional costs in the whole production chain and thus

increasing the cost of living (see diagram).

Disincentives to investHong Kong attracts overseas

investment due to simple tax system and low tax rate.

Imposing sales tax will increase the production cost for enterprises. So the inflationary pressure induced adds burden to workers. Therefore they will bargain

for higher nominal wage, which further increases cost of the production. The investment incentive will decline.

Administrative cost Government needs to pay for the

administrative cost such as setting up departments when imposing sales tax.

TourismTourism accounts for 4.5% of GDP and

6.5% of employment in Hong Kong. After imposing sales tax, price advantage of Hong Kong goods will be lost. The quantity demanded of goods of both locals and foreigners will decrease. Sales revenue net of tax of the retailing industry must fall.

Should sales tax be imposed in Hong Kong?Sales tax is very common among developed countries. However, in 2006 the proposal of sales tax was turned down by

the locals in Hong Kong. We will study the possibility of the implementation of sales tax in Hong Kong by looking into the arguments for and against the policy.

A widened tax base The source of government income is

limited and over-dependent on a few sectors now. Sales tax is an indirect tax on every consumption of goods and services. Upon the introduction of sales tax, more people will fall into the tax net as all citizens are taxpayers. So, the tax base will be widened.

Risk of future fiscal deficit(i) Cyclical Deficit

Hong Kong is over-dependent on direct

tax but it fluctuates with GDP. So business cycle may result in unstable tax revenue.

In 2008, the fluctuation of Japan’s sales tax revenue is much smaller than that of the corporation tax. It shows that the sales tax revenue is less susceptible to cyclical fluctuation.( i i) Deficit arise from ageing population

I n 2 0 4 1 , o n e - t h i r d o f t h e population will be elderly. They rely much on government support,

thus causing large government expenditure. Meanwhile, revenue generated from direct tax will fall. So, future deficit appears.

If sales tax is implemented, business cycle will cause a less severe deficit as the government revenue will be stabilised.

For

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語出經人經濟分析比賽

冠軍

Text: Fung Miu Hing, Mak Cheuk Yi, Wan Kwing Wai, Chow Pui Yin, Leung Cheuk Pan (Hoi Ping Chamber of Commerce Secondary School)

校園經濟︱12月號18

▲圖為冠軍隊伍旅港開平商會中學的同學，與三位評判香港大學教育學院副院長彭明輝博士（右二）、考評局人文學科評核發展經理徐力航（左二）及教育局局長政治助理施俊輝（左一），以及主辦單位之一香港經濟教育協會主席馮漢賢（右一）合照。

SRAS2LRAS

P0

Y0Y1

Pricelevel

RealGDP0

P1

AD

SRAS1

圖片：法新社、資料圖片

語出經人經濟分析比賽

亞軍

簡介

　　校園經濟與香港經濟教育協會已連續第二年舉辦「語出經人經濟分析比賽」。比賽旨在讓同學將理論轉化為實踐，提升運用經濟學的能力。第二屆活動於2014年中推出，經過首階段的評審和總決賽的口頭滙報環節，活動的冠、亞及季軍隊伍亦已誕生。《校園經濟》今期將刊登冠、亞、季軍得獎隊伍的專題報告，與讀者分享他們的經濟見解。［編者按：由於篇幅所限，文章經修改及刪減。］

　　由於香港人口上升、單身家庭湧現、公營房屋供應下降、香港樓宇成為內地人的投資工具、政府的勾地政策……等，都導致私人樓宇市場嚴重失衡，出現淨損失，促使政府推出打壓樓市的措施，藉着降低需求及增加供應，雙管齊下來使私人樓價降溫。

打壓需求的政策成效　　政府推出三項樓宇印花稅（俗稱三辣招），來增加炒家的炒樓成本，令需求下降。　　不過，額外印花稅（Special StampDuty,SSD）迫使短綫炒家改為長綫投資者，結果令供應比需求有更大的下跌幅度，樓價被推得更高，措施造成反效果（見圖1）。

　　此外，買家印花稅（Buyer'sStampDuty,BSD）有效地令非香港永久性居民和有限公司卻步；雙倍印花稅（DoubleStampDuty,DSD）則主要針對炒家，它們都成功地把物業的需求降低，使樓價有較大幅度的下跌（見圖2）。

　　因此，我組建議政府撤銷額外印花稅，並把買家和雙倍印花稅的打擊範圍收窄至1,000萬元或以下的物業，將炒家分流

至1,000萬元以上的豪宅市場，使1,000萬元以下的中小型物業價格下跌（見圖3），讓港人可以有能力及有機會置業自住。

增加供應的政策成效　　政府亦可從增加供應着手（見圖4），為私樓降溫，措施包括活化工廠大廈、復建居屋、發展新界東北和將政府機構、社區用地或綠化地帶發展成住宅用地來增加樓宇的供應。

　　然而，因工廈其他用途的回報較高，故此業主都沒有將工廈改裝為住宅出租，結果私人物業供應沒有因此增加。而政府改劃社區用地的面積太小，也破壞城市規劃，故以上兩項措施應予以撤銷。至於57公頃綠化地帶，共可提供23,000個新單位，能大量增加香港的房屋供應，可繼續推行。

　　居屋和中小型單位是代替品的關係，復建居屋能減低人們對中小型單位的需求（見圖5）。而且居屋的售價是私人樓宇市價的7成，私樓和居屋的樓價便同時降低，中低下階層會較易置業，故我組支持政府繼續興建居屋。

　　至於發展新界東北，則能大大提升住屋供應，政府可引入「港人港地」及限尺樓等條款，對原居民作出合理賠償等方法增加措施的可行性，中小型樓宇價格才有望回落，故計劃不應被撤銷。　　針對政府推出的7項打壓樓市的措施，我們作出了相應的分析及建議。希望政府能作出調整，加強力度，使中小型樓價下降，讓香港市民能置業安居。

撰文：陳美盈、解蓓蓓、洪家希、林芊希（香港真光中學）

▲圖為亞軍隊伍香港真光中學的同學及指導老師與評判團及香港經濟教育協會主席合照。

12月號︱校園經濟 19

圖２

P2

Q2 Q1

$ 物業

Q0

P1

S1

D1D2

圖３

P2

Q2 Q1

$ 1,000萬元或以下的物業

Q0

P1

S1

D1D2

圖５

P2

Q1Q2

$ 中小型私人樓宇

Q0

P1

S1

D1D2

圖４

P2

Q2Q1

$ 私人物業

Q0

P1

S1

D1

S2

圖片：本報攝影組、資料圖片

圖１

P2

Q2 Q1

$ 私人物業市場

Q0

P1

S2

D1D2

S1

語出經人經濟分析比賽

季軍

Can Bitcoin replace traditional money in the future?Bitcoin is a digital currency of a software-

based online payment system, it is stored in a “digital wallet“, either in the cloud or on a computer. Transactions are done entirely on the Internet. Therefore, without going through a clearing house, it significantly minimises transaction cost. Only the user ID of buyers and sellers will be shown to keep their transactions private.

Bitcoins are “mined” by solving complex math puzzles with computers, since they are not easily generated, thus it gets its value.

What is a good money?A good money acts as a unit of account, a

store of value, a medium of exchange and the standard of deferred payment. It should also be generally accepted. The US dollar is a better money than the Hong Kong dollar because it is more generally accepted. It is the standard unit of currency in international markets for gold and petroleum. Non-U.S. companies dealing in global markets, such as Airbus, list their product prices in dollars. It is also used as an international reserve currency.

Generally acceptedThere are now over 5,000 companies

a c c e p t i n g B i t c o i n c o m p a r i n g t o o n l y 552 companies at its commencement in November 2013. However, most of our daily use of money is in traditional currency instead of Bitcoin since it is a relative new concept. There are very few infrastructures available for paying by Bitcoin, thus it is not generally accepted.Portability

Bitcoin is more portable since it is a digital money. People can carry a mobile phone with Bitcoin wallet, make transactions by scanning the product’s QR code and input the address of seller’s Bitcoin wallet. The process is more convenient and faster. It

doesn’t require people to hold a purse, which they need to when carrying traditional money.

DurabilityBi tcoin i s a lmost imposs ib le to be

destroyed since it is a digital currency. It is more durable. Traditional money is easier to be destroyed since it has a physical state and can be worn out or torn off. Divisibility

US dollar's minimum transaction unit is $0.01 while that of Bitcoin is 0.00000001BTC. Bitcoin is more divisible than US dollar. Bitcoin is more suitable for transactions in small scale.Homogeneous

1 US dollar has the same value of another 1 US dollar. 1 unit of Bitcoin has the same value of another 1 unit of Bitcoin. It means both traditional money and Bitcoin are equally homogeneous in normal daily use.Stability

The graphs show that the value of Hong Kong dollar is more stable than that of Bitcoin. The reason is that Hong Kong dollar has the support from the government to stablise its value.

Conclusion

Bitcoin Traditional money

General acceptance Lose Win Portability Win Lose Durability Win Lose Divisibility Win Lose

Homogeneous Draw Draw Stability Lose Win

Win-Draw-Lose ratio 3-1-2 2-1-3

As the above table shown, Bitcoin has its own strengths and weaknesses, it is actually better than traditional money in the aspect of portability, durability and divisibility. However, we cannot find obvious weaknesses and strengths from traditional money, while Bitcoin obviously has some problems to overcome, like stability and to gain public acceptance. Therefore, it still needs to work on the stability of value to gain public trust.

▲圖為季軍隊伍港大同學會書院的同學及指導老師，與評判團及香港經濟教育協會主席合照。

Text: Jason Wong, Jonathan Ho, Steven Ma, Kevin Lau (HKUGA College)

校園經濟︱12月號20

2011 2012 2013 2014

1,000USD

source: www.coindesk.com

The value of 1 Bitcoin in terms of US Dollar

7505002500

2011

USD

source: Yahoo Finance

The value of 1 HK Dollar in terms of US Dollar

0.1280

0.1285

0.1290

2012 2013 2014

圖片：路透社、資料圖片