Face to Face with Tam Tai-pang, JP, Commissioner of Inland Revenue

As the Commissioner of Inland Revenue, Tam Tai-pang is currently the leader of the Inland Revenue Department (IRD), a 74-year old government division. Over the decades, the Department has evolved and adapted to societal, legal and technological changes – from commencing the use of computers for storing and analysing assessment data for the first time in the 1960s to enacting new Ordinances when appropriate. Today, propelled by the pandemic and global digitalisation, the department is on the path for even more changes and initiatives.


Hong Kong as a city has faced major transformations since the inception of the IRD. In the past seven decades, the city went from a small entrepot in the post-war era, to being known as the “Pearl in the Orient” thanks to its neon light industry which lit up the city from signs for small shops on busy streets to giant record-breaking signs atop skyscrapers alongside the Victoria Harbour, to today being known as an internationally renowned financial centre. The role and function of the IRD has evolved with the city.

In the early days, the Inland Revenue Ordinance was the only legislation administered by the Department, covering salaries tax, property tax, interest tax and profits tax. The Department was subsequently given responsibility for estate duty, stamp duty, entertainments tax, betting duty, public dance-halls tax, business registration and hotel accommodation tax. However, taxes change with time, responding to socio-economic trends. In the process of Hong Kong’s economic transformation, public dance-halls tax, interest tax, entertainments tax and estate duty were abandoned. Around ten years ago, hotel accommodation tax was waived in July 2008. The tax laws of Hong Kong are well regarded, not only for their low rates, but also for their simplicity and clarity. Today, only business profits, salaries and wages, and property rental income are subject to tax and instead of just a single ordinance, the IRD administers a total of seven ordinances. The city has no capital gains tax or dividends tax, and interest income is, in certain circumstances, tax-free. In essence, only income and profits derived from Hong Kong are taxable. This tax system has long been recognised as a major contributing factor to the economic development and commercial competitiveness of Hong Kong.

For Tam personally, his evolution happened more within the IRD itself. He joined the Department upon graduating from university and has been working for it ever since. “I graduated from the Hong Kong Polytechnic (now the Hong Kong Polytechnic University) in 1986 studying accountancy. While taxation was one of the subjects studied, it was by chance that I joined the IRD right after graduation,” he shares. “As a fresh graduate, interacting with taxpayers from all walks of life (sometimes disgruntled) was quite a challenge. Later on, working in the Appeals Section and representing the Department in hearings of the Inland Revenue Board of Review (an independent statutory body established under the Inland Revenue Ordinance to determine tax appeals) to defend tax assessments was both rewarding and stressful. These experiences nonetheless helped me build up greater confidence in facing people and explaining the Department’s position,” he adds. His roles “as a Chief Assessor and then the Assistant Commissioner of the Field Audit and Investigation Unit between 2010 and 2013 were most fulfilling when the teams under [his] supervision successfully tackled some large-scale tax avoidance schemes,” he recalls. Then came the role of Deputy Commissioner which required Tam to analyse and resolve issues from the perspective of the whole Department. That experience “enabled me to have a more thorough understanding of the operations of the Department,” shares Tam.

Evolving and adapting as he took on each role in his career with the IRD, Tam was ready to be at the helm of the Department when he took charge in August last year. “When I took up the current post in August 2020, society continued to be under the threat of the COVID-19 pandemic and the Department had to implement special work arrangements. The Department had to strive to deliver its services and meet work targets as far as possible and at the same time assist taxpayers to fulfil their tax obligations in these difficult times,” he shares. At the same time, on the international front, the Organisation for Economic Co-operation and Development (OECD)’s work on addressing tax issues arising from the digitalisation of the economy and implementing a global minimum tax scheme was progressing at full steam, requiring Tam to take on the reins to closely monitor the development and work out detailed analyses for the Government’s consideration.


A simple legal definition of taxation is the process whereby charges are imposed on individuals and entities by the legislative branch of the government to raise funds for public purposes. From notorious “tax havens” to infamous tax evasion scandals, taxation as a concept or an act has been debated, challenged and discussed at length. However, its role in maintaining a stable and prosperous society cannot be undermined, and with that, neither can the role of the IRD be. “The primary role of the IRD is to collect tax timely and effectively in accordance with relevant laws so as to provide the Government with a significant source of revenue to sustain its recurrent expenditures and implement various public policies,” shares Tam. “As a tax authority that is committed to providing efficient and professional services, facilitating compliance, as well as upholding transparency and integrity in the administration of tax laws, the IRD, I believe, also contributes to maintaining a business-friendly environment for Hong Kong,” he adds.

Just like in the past, taxation must respond to socio-economic challenges and with the pandemic affecting businesses and employees all over the city, the IRD was not behind in doing its part. In fact, Tam views these challenges as drivers for improvement. “For instance, the pandemic propels the IRD to more technology adoption such as online booking for business registration services, e-Stamping for share transfer documents in bulk, and wider use of electronic filing (for profits tax returns and various application forms) and electronic payment (e.g. Faster Payment System). To enhance transparency of tax administration, the IRD has also published more tax information, guidance and statistics on its website. More trade engagements and consultation exercises, whether formal or soft, have been arranged to gauge views from taxpayers or tax practitioners on complicated or controversial tax issues at an early stage,” he shares.

However, the Department has had to face and overcome challenges of its own. “The economic downturn brought by the pandemic poses challenges to the IRD’s work in revenue collection. With many business sectors facing financial difficulties and the level of unemployment reaching its highest for more than a decade, tax in default may increase as the financial capability of most taxpayers has been adversely affected by the downturn,” shares Tam. “To ease the financial burden and cash flow of taxpayers, the IRD has extended the deadlines for settlement of the relevant 2018/19 tax demand notes that fell due in April to June 2020 by three months. In August 2020, a further relief measure was announced to waive surcharge on any instalment plans approved for settlement of the relevant 2019/20 tax demand notes subject to certain conditions,” he adds.

The pandemic has also given the IRD an opportunity to address some of the pain points of residents. “A hard fact of life is that the IRD is duty bound to collect tax from taxpayers in accordance with the law regardless of the economic environment. That said, there remains room for the IRD to alleviate taxpayers’ compliance burden within the legal boundary. For example, in July and September 2020, the IRD extended the deadlines for filing certain categories of profits tax returns,” shares Tam. “Besides, the IRD has streamlined some administrative requirements for tax compliance and adopted a pragmatic approach in processing certain tax-related applications such as those for holding over of provisional tax and instalment payment of tax. Our assessors stand ready to provide taxpayers with further assistance where appropriate during this difficult time,” he adds.


In terms of the future, further digitalisation of tax processes, more double taxation agreements and international tax initiatives, and various new tax bills are on the horizon. This year up to the present, the Legislative Council (LegCo) has passed various tax bills including the Inland Revenue (Amendment) (Tax Concessions for Carried Interest) Bill 2021 which provides profits tax concessions for carried interest distributed by eligible private equity funds operating in Hong Kong, and the Stamp Duty (Amendment) Bill 2020 which abolishes the doubled ad valorem stamp duty for non-residential property transactions. There are also a number of tax bills being scrutinised by the LegCo, such as the Inland Revenue (Miscellaneous Provisions) Bill 2021 which addresses matters relating to the tax treatments for court-free amalgamation of companies and transfer or succession of specified assets, electronic filing of profits tax returns and deduction of foreign tax, and the Securities and Futures and Companies Legislation (Amendment) Bill 2021 which provides for, among others, a new stamping method for the collection of ad valorem stamp duty on transactions involving shares in uncertificated form.

On the digitalisation front, the IRD is one of many tax authorities around the world who are moving rapidly towards electronic filing. “With the wealth of data captured by electronic systems, work efficiency can improve, and humans can focus on the processes that require professional judgement. The COVID-19 pandemic has also pushed tax authorities around the world to digitalise so as to enable taxpayers to handle their tax affairs remotely while also ensuring security of tax data,” shares Tam. “In this regard, the IRD is at present undertaking a project for enhancement of its information technology systems and facilities. The project will strengthen, among others, the electronic filing services for businesses and tax representatives,” he adds.

On an international or cross-border scale, the IRD is keen on concluding more double taxation agreements and complying with international taxation standards and practices. “Double taxation agreements address cross-border tax issues and are conducive to international trade. Hong Kong has entered into such agreements with a number of jurisdictions, including those along the Belt and Road such as India and Saudi Arabia,” shares Tam. He believes that as an international finance center, it is crucial for the city to be a part of the international tax community. “Hong Kong has in recent years implemented a number of international tax initiatives, including the Automatic Exchange of Financial Account Information in Tax Matters and a package of measures to counter Base Erosion and Profit Shifting (BEPS), both promulgated by the OECD. The IRD has been taking active part in the work on international taxation,” he adds.

The OECD, an intergovernmental economic organisation with 37 member countries and its Inclusive Framework on BEPS comprising 139 tax jurisdictions including Hong Kong, is currently drawing up new proposals in the areas of digital tax and global minimum tax to address BEPS (commonly known as “BEPS 2.0”). “The Financial Secretary has set up an advisory panel to assess the impact of the proposals on Hong Kong and collect views from relevant stakeholders. It is anticipated that legislative amendments will have to be pursued to provide a legal framework for implementing the BEPS 2.0 initiatives, having regard to the international consensus reached on the proposals and the Government’s decision on the appropriate responses for Hong Kong,” explains Tam.

How would these international tax initiatives and changes impact Hong Kong? “The BEPS 2.0 initiatives, in particular the global minimum tax proposal, would probably increase the tax cost of doing business in Hong Kong for large multinational enterprise groups. The proposal, if implemented, would generally require the charge of “top-up tax” on profits which are not taxed at an effective rate up to the minimum rate. This would likely apply to many large multinational enterprise groups with companies operating in Hong Kong because of the unique features of our tax system, including the exemption of offshore profits and capital gains,” explains Tam. “The interaction between the proposal and our present tax system, and how Hong Kong’s competitiveness can be maintained or even strengthened in view of the new international game rules, are issues that should be high on the agenda for the Government and business sector,” he adds.

Tam reassures that prior to these initiatives being introduced, the government will engage stakeholders to discuss the impact of such initiatives and seek their feedback. In this regard, he believes collaboration with the legal industry is key. “We appeal to the legal profession for their active participation in the engagement exercises,” shares Tam. “The IRD regards lawyers as one of its key working partners and is grateful for their contributions over the years. Lawyers have represented clients to handle tax issues professionally and provided useful input on various legislative amendments and administrative arrangements in relation to taxation,” he adds. Tam particularly values the role of lawyers when it comes to facilitating meaningful communication between clients and the IRD which in most cases, has contributed to an amicable settlement. “Facing the increased complexity of tax laws and business operations, we will continue to count on the support, dedication and professionalism of the legal profession,” he adds.