The Hong Kong government is not planning to increase taxes despite a rise in pandemic-related public spending, according to Secretary for Financial Services and the Treasury, Christopher Hui Ching-yu.
Speaking at the Legislative Council, Hui said the government’s low tax regime is one of the keys to its success in retaining its competitiveness and is “of utmost importance” in boosting Hong Kong’s competitive edge.
Public health spending has risen from HK$71.1 billion to HK$162.8 billion; spending on the economy increased from HK$16.4 billion to HK$106.7 billion; whilst social welfare spending rose from HK$70.3 billion to HK$120 billion, compared from 2017/18 to 2022/23 estimates.
“In view of the economic environment and impacts of the epidemic, businesses and individuals are generally under considerable financial pressure. The government considers that this is still not the appropriate time to revise the rates of profits tax,” Hui said.
He added that the increasing public health spending was down to Hong Kong’s efforts in tackling the pandemic, whilst the implementation of the consumption voucher scheme fuelled the rise in spending to bolster the economy.
The Secretary for Financial Services and the Treasury also said that the government continues to look at ways to boost revenue, having already increased the rate of Stamp Duty on Stock Transfers last year, which will hike revenue by an annual HK$12 billion.
Moreover, the government is set to introduce a progressive rating system for domestic properties in 2024-25 to show the “affordable users pay” principle, Hui said.
“Overall, the government’s current fiscal position is sound and healthy. In the face of the complex and volatile international political and economic environments, the government will continue to exercise prudence in managing public finance and retain its financial strength to cope with unknown circumstances and needs,” he went on to add.
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