Financial Secretary Paul Chan announced a slew of one-time relief measures, including tax breaks, rates waivers and extra social security payments, in his budget speech Wednesday.
The HK$32 billion package came as he revealed that the government is set to post a HK$92.8 billion surplus for the 2016-17 financial year, public broadcaster RTHK reports.
Among the relief measures, salaries taxes will be slashed by 75 percent, subject to a HK$20,000 cap, for 2016-2017. This will benefit 1.84 million taxpayers in the city.
Meanwhile, property rates will be waived by up to HK$1,000 per quarter for the coming year, affecting 3.2 million properties. This will cost the government HK$10.9 billion in lost revenue.
Also, welfare recipients, along with those who receive the Old Age Allowance, Old Age Living Allowance, or Disability Allowances, will receive one extra month’s worth of payments.
Homeowners who have mortgages will be entitled to tax deductions for 20 years, up from 15 at present, while the maximum deduction stays unchanged at HK$100,000 per year.
Delivering his maiden budget speech, Chan said the government is likely to record a surplus of HK$92.8 billion for the 2016-17 financial year, more than eight times the original estimate of HK$11 billion.
Stronger-than-expected land sales income boosted overall revenue to HK$559.5 billion, 12 percent more than the initial estimate.
Meanwhile, government expenditure is expected to reach HK$466.7 billion, some HK$20 billion lower than the initial projection.
While announcing the relief measures, Chan warned against “reckless” commitments to long-term spending, saying any recurrent measures that are introduced must be sustainable.
He noted that it is “difficult to tell whether revenue from land sales in the future will continue to hit successive new highs”.
Although he agrees the government can afford to be more proactive, “we should avoid reckless commitments” he said, adding that “public spending must be fit for purpose”.
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