With ample surplus expected in government coffers, Hong Kong’s Financial Secretary John Tsang is considering fresh “giveaways” to the public, possibly through tax refund or rates concession, Sing Tao Daily reported Tuesday, citing unidentified sources.
Tsang said earlier that the government should have no problem in recording a surplus of at least HK$20 billion to HK$30 billion this fiscal year. Given the surplus, the finance chief may offer one-off income tax deduction or rates waiver, sources told Sing Tao.
According to global accounting firm KPMG, Tsang could reveal in his budget speech next month that the financial surplus in the current fiscal year ending March would actually reach HK$65.5 billion (US$8.44 billion).
Even excluding the HK$27 billion that will be injected into the housing reserve fund, there will still be HK$38 billion remaining, far more than the originally expected HK$9.1 billion.
The situation puts the government in a good position to offer some giveaways to the public, KPMG feels.
Ayesha M. Lau, partner in charge for tax business at KPMG Hong Kong, said the government’s financial reserves will be as much as HK$800 billion, representing about 40 percent of the city’s GDP and pointing to a healthy financial condition.
She expects Tsang to announce some one-off relief measures, including a re-launch of electricity subsidy and waiver of rates for two quarters.
Lau suggested that the government should consider offering some new measures to help grow the economy.
Tax incentives that can encourage the elderly and women to return to the labor market, tax deduction for newly weds and halving the stamp duty for first-time home buyers are some ideas that Tsang should consider, she was quoted as saying.
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