hongkong fooey,
your income is increased by 10% and then you pay tax on that increased amount. So if the tax rate was 15%, you effectively pay 16.5% (15% +10%*15%).
If you actually pay rent out of your pocket then that reduces your taxable income by up to 10%, once it has been increased by 10%!!!!!!
If you earn $75K and rent under the RFZ say $58K, you will have your taxable salary increased by 10% to say $82.5K (ignoring 13th month, education etc). Housing rental allowance is not taxed but you then have your salary increased by 10% to reflect the housing assistance(renting only). As a purchaser you pay tax on the entire amount of housing/mortgage assistance(some deduction for first $100K in interest I think?)
If you earn $100K and rent a place for say $80K(obviously a captain) then you will have your income increased by $10K (10%) but then reduced by the amount you pay which would be 8% of $80K which is $6.4K. So your taxable income is $100K + $3.6K($10K - $6.4K) = $103.6K
For those that aren't aware once you go over the RFZ(8years in CX) you pay 8% of the total amount of assistance if you choose to rent above RFZ up to your applicable ceiling.
clear as mud?