Li Ka-shing calls for higher corporate taxes in Hong Kong to tackle wealth inequality

Mr Li Ka-shing opposes the idea charging higher tax rates for the rich.
Mr Li Ka-shing opposes the idea charging higher tax rates for the rich.PHOTO: BLOOMBERG

HONG KONG (Bloomberg) - Hong Kong's richest man called for higher corporate taxes to help tackle wealth inequality and urged the government to think of ways of countering rising discontent among its younger residents by providing them with more opportunities.

"Tax companies an extra 1 or 2 per cent, then a lot of the poor would benefit," CK Hutchison Holding chairman Li Ka-shing told Bloomberg Television's Angie Lau in his first interview with international media since 2012.

"The most important thing the government needs to think about are the options made available to young people."

Mr Li, who says the city is going through its toughest times in two decades, is weighing in on the global income-inequality debate that's prompted the likes of Mr Warren Buffett and Mr Bill Gates to call for higher taxes for the rich. 

While low taxation has helped put Hong Kong atop the IMD business school's list of most competitive places to do business in the world, one-in-seven residents there live in a household earning less than US$2,100 (S$2,820) a month.

The wealth gap in Hong Kong - with the holdings of the 10 richest billionaires exceeding one-third of annual economic output - has been blamed for feeding unrest including pro- democracy protests that paralyzed the city in 2014 and a February riot that injured scores of police officers.

That's drawn the attention of China's central government, which has ordered leaders in the former British colony to put aside political debates and focus on improving livelihoods.

As to levies, Hong Kong has among the lowest corporate-tax rates in the world by capping them at 16.5 per cent, compared with 40 per cent in the United States and an average 23.6 per cent globally, according to accounting and advisory firm KPMG.

Unlike Mr Buffett and Mr Gates, Mr Li opposed the idea charging higher tax rates for the rich.

"You mustn't tax some people more and some people less or else it's chaos," he said.

The tycoon, in his interview on Thursday, singled out education and healthcare as areas where officials could be funding more with additional taxes.