HK budget: Chan unveils fresh relief measures for businesses

February 26, 2020 18:23
Hong Kong's finance chief announced on Wednesday that the government will roll out more measures to support businesses hit by the coronavirus outbreak and months of social unrest. Photo: Bloomberg

Financial Secretary Paul Chan Mo-po said in his budget speech on Wednesday that the government will earmark HK$18.3 billion to support businesses that have been hit by the economic downturn following the coronavirus outbreak and months of social unrest.

"Since January 2020, Hong Kong has come under the threat posed by the novel coronavirus outbreak, which further dealt a blow to the economy. We must take decisive measures to tackle the situation," Chan said. 

The government had earlier announced a HK$30 billion Anti-epidemic Fund to implement 24 measures to further enhance the administration's capability in combating the epidemic and provide assistance to enterprises and members of the public, the financial chief noted, adding that he would roll out measures to give further relief to the community.

Presenting the budget proposals for the financial year that starts in April, Chan outlined five new measures to support business enterprises.

The first one is concessionary low-interest loans with 100 percent government guarantee, with the scheme open for application for six months. Under this initiative, the maximum loan will be HK$2 million with repayment period up to three years. There will be moratorium on principal repayment for the first six months. The government will provide guarantees of up to HK$20 billion in total under the concessionary loan scheme.

The second measure is to reduce profits tax for the 2019-20 assessment year by 100 percent, subject to a ceiling of HK$20,000. The reduction will be reflected in the final tax payable for the year of assessment 2019/20. This will benefit 141,000 taxpayers and reduce government revenue by HK$2 billion.

The third one is waiving rates for non-domestic properties for 2020-21, subject to a ceiling of HK$5,000 per quarter in first two quarters and HK$1,500 per quarter for the remaining two quarters. This proposal is estimated to benefit 420,000 non-domestic properties and reduce government revenue by HK$3.2 billion.

The fourth initiative involves waiving business registration fees for 2020-21, a measure expected to benefit 1.5 million business operators. The move will reduce government revenue by HK$3 billion.

The fifth measure is waiving registration fees for company annual returns for two years. This will benefit about 1.4 million companies and reduce related revenue by about HK$212 million in total.

The government also continues to implement relief measures announced last year. The first is subsidizing 75 percent of electricity charges for four extra months, subject to a monthly cap of HK$5,000, for non-residential accounts. This will involve an expenditure of about HK$2.9 billion.

The second one is waiving 75 percent of water and sewage charges of non-domestic households for four extra months, subject to a monthly cap of HK$20,000 and HK$12,500 respectively. This will reduce government revenue by HK$340 million.

For local recycling enterprises, they are provided with HK$100 million rental subsidy for six months. This will involve an expenditure of about HK$100 million.

Fourth, there is rental reduction by 50 percent for another six months for eligible tenants of government properties, government land and EcoPark. This will reduce government revenue by HK$573 million.

The fifth is reduction of rental and fees by 50 percent for another six months for eligible operators of properties covered by short-term waivers. The move will reduce government revenue by HK$265 million.

Among other measures, there will be a 50 percent reduction for six months in hire charges for civic centers under the Leisure and Cultural Services Department. The concession will reduce government revenue by HK$23 million.

In addition, fees and rent for cruise lines and cruise terminal tenants will see reduction for six months. This will bring down the government revenue by HK$18 million.

"I hope that [the measures] will not only help support our enterprises but also safeguard jobs for more than three million workers," Chan said in his budget speech, urging all employers and employees to “stand together to ride out the difficult times.”

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JC/RC

EJ Insight writer