Date
20 January 2017
Hong Kong's economy is laden with risks, and the outlook is far from promising, Financial Secretary John Tsang said in his annual budget speech. Photo: HKEJ
Hong Kong's economy is laden with risks, and the outlook is far from promising, Financial Secretary John Tsang said in his annual budget speech. Photo: HKEJ

SMEs, tourism get shot in the arm from budget

Small businesses came away with some of the biggest incentives from a government budget aimed at easing risks to the economy.

The government said it will slash profits tax and waive business registration fees to support small and medium-sized enterprises (SMEs).

Financial Secretary John Tsang announced the measures Wednesday in his annual budget.

For the fiscal year to March 31, profits tax will be cut 75 per cent, subject to a ceiling of HK$20,000.

The proposal, which will cost the government HK$1.9 billion (US$244.5 million), will benefit 130,000 taxpayers.

More than 1.3 million enterprises will not have to pay business registration fees from April 1 under a HK$2.5 billion incentive program.

“The local economy is laden with risks in the year ahead. The outlook is far from promising,” Tsang said.

“We need to take timely and appropriate measures to stimulate the economy, support local enterprises and safeguard employment.”

The government will extend the application period for the SME Financing Guarantee Scheme to Feb. 28, 2017, to help SMEs tide over their liquidity needs.

Also, it will reduce the annual guarantee fee rate by 10 per cent and remove the minimum guarantee fee.

Tsang announced a HK$500 million voucher program to subsidise technology companies and upgrade business processes.

The three-year pilot scheme will match private investment in tech companies up to a maximum of HK$200,000 for each eligible SME.

Other measures announced by Tsang include HK$140 million and HK$240 million in short-term and long-term support, respectively, for the tourism industry. 

These include a one-year license fee waiver for travel agents, hotels, guest houses, restaurants and hawkers.

These measures are expected to benefit 1,800 travel agents, 2,000 hotels and guesthouses and 27,000 restaurant businesses.

Also, license fees for restricted food permits will be waived for one year.

In the medium term, the government will ramp up support for key events such as the Formula E Championship, the Hong Kong Wine and Dine Festival, the Hong Kong Cyclothon and light shows.

It will continue to promote Hong Kong’s natural scenery, history and culture, including improvements to the Dr. Sun Yat-sen Historical Trail.

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