The tax system in Hong Kong is often presented as a model for efficiency in terms of tax compliance and administration. The design features of the tax system contributed to the jurisdiction’s status as a preferred hub for international investment, but the equity impact of the system in terms of Hong Kong residents has scarcely been examined. The article analyses how tax exclusions, concessions and preferential rates have benefited the wealthy more than the poor and have prevented the income tax system from playing a role in mitigating the striking disparity in income distribution in the jurisdiction comparable to the role it plays in Hong Kong’s developed counterparts. The lessons from Hong Kong offer a striking example of the extent to which tax law design can impact on equity and social stability. In a world of growing income inequality, any effort to make a tax system more equitable is worth serious consideration.