Civil service, teachers start paying income tax
By May Chan

Starting in October, a new rule is enacted to levy income taxes on civil servants, teachers and clergy in Macao. The move reflects a government effort to make the tax system conform to the principle of social justice and equality.

In December 2002, the Macao SAR Government published the Government Policy Guidelines, stipulating that civil servants would start paying income tax in 2003.

This motion put an end to the privilege that had been enjoyed by civil servants, teachers and clergy in the enclave for nearly four decades. In 1964, the colonial government of the time issued a policy which exempted civil servants from paying income tax.

Eric Chan, a company manager, says, ˇ§I've been working in Macao for 10 years. I started paying the income tax while I worked as a manger. Before this new rule, I was not very happy with the situation where civil servants, teachers and clergy who received high salaries were exempted from paying the income tax.ˇ¨

The cancellation of the tax exemption was effective as of October 2003. The bill was endorsed by the Legislature at the beginning of July. Cherry Lee, a secondary teacher and a new tax payer, said that she totally agreed with the new regulation of the Professional Income Tax because it is quite fair to all members of the Macao society.

In addition, the government has made some special revisions to make the new imposition acceptable for all the population. After the revision of the income tax regulation in 2003, the exemption level of taxable income has been raised from MOP 85,000 to MOP 95,000 and the income tax rates have been reduced from 10-15 percent to 7-12 percent.

A middle-rank civil servant, Cyrus Wong said, ˇ§My salary scale index is 550. For a monthly tax imposition, I need to pay about MOP 900. I think this payment is acceptable since this is not a large amount comparing to my salary. I do agree that tax imposition should be every residentˇ¦s responsibility.ˇ¨

In Article 4 of the Regulation of Imposition of Professional Income Tax, it is stated that 25 percent of the annual income is exempted in calculation of the tax imposition. Under the new regulation, other items that can be exempted from the imposition include accommodation allowances, family subsidies, social welfare, pensions, compensation on dismissal, etc.


The rate of new professional income tax is listed as follows: ˇ@
Taxable Annual Income Income tax rate
Below MOP 95,000

Progression of Exceeding Amount
From MOP 1 to 20,000
From MOP 20,001 to 40,000
From MOP 40,001 to 80,000
From MOP 80,001 to 160,000
From MOP 160,001 to 280,000
Above MOP 280,000

Exemption


7%
8%
9%
10%
11%
12%