Accounting firms are calling on the government to carry out a comprehensive review of the city’s tax regime and to expand its tax base to tackle a potential fiscal deficit amid uncertainties in the economy.
In a report Thursday, the Hong Kong Economic Journal quoted Jeremy Choi, tax services partner at PricewaterhouseCoopers Hong Hong, as saying the tax initiatives in the 2016 budget in support of startups and the development of innovative and high technology are laudable.
Davy Yun, tax services partner at Deloitte Touche Tohmatsu, echoed Choi but criticized the latest budget for a lack of measures to widen the tax base.
The Association of Chartered Certified Accountants Hong Kong estimated that the fraction of the city’s gross domestic product that public expenses account for will reach 21.2 percent in the coming fiscal year, surpassing the healthy level of 18 to 20 percent for two consecutive years.
The problem of a potential structural deficit is worrying and the government should review and revamp the tax regime in the medium to long term, the association said.
The Hong Kong Institute of Certified Public Accountants called on the government to set up a task force of accountants and scholars to prepare for measures to expand the city’s tax base in the long term.
[Chinese version 中文版]
– Contact us at [email protected]