Financial Secretary John Tsang could put a smile on the faces of middle-class people by announcing more incentives and tax-relief measures during his upcoming annual Budget Speech.
Rumored tax incentives include a waiver of 75 percent of salaries tax up to a limit of HK$15,000 per person, Apple Daily reported Thursday. That would mark an increase in such relief from last year, when the maximum waiver was HK$10,000.
Other sweeteners that could be offered include a hike in the tax allowance for each dependent child to HK$80,000 from the current HK$70,000, the report said.
Sources close to the government were quoted as saying that Tsang will finalize the various incentives and relief measures, including a rent waiver for public housing residents, before the Chinese New Year holiday.
The government is believed to be sitting on a surplus of HK$60 billion for the current financial year, five times the budgeted amount of HK$9.1 billion, thanks to the profits tax surplus brought forward from the previous financial year and a significant increase in income from multiple stamp duties that were introduced to prevent property prices from rising too quickly.
Meanwhile, filibustering at the Legislative Council is said to have led to reduced spending on several large infrastructure projects, helping boost the surplus.
The government has offered a salaries tax waiver of 75 percent in 2013 and 2014, with a ceiling of HK$12,000 and HK$10,000, respectively. The scheme translated into a loss of salaries tax income of around HK$8.9 billion for the year 2013.
The increase in child allowance to HK$80,000 was a promise made by Chief Executive Leung Chun-ying during his election campaign in 2012. In the previous hike in such allowance, the government had raised it from HK$63,000 to the current level of HK$70,000.
Among other measures, Tsang is expected to waive property owners’ rates payment for two quarters, with a ceiling of HK$1,500 per household per quarter.
Political parties have been receptive to the suggestions, with legislator Jeffrey Lam of pro-business group Economic Synergy saying that raising the salaries tax waiver cap to HK$15,000 is a must.
Liberal Party lawmaker Vincent Fang Gang also said the increase in salaries tax waiver will be good news for the middle-class, given the rather uncertain economic environment.
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