Hong Kong SAR Budget 2019/2020
The Financial Secretary for the Hong Kong Special Administrative Region (HKSAR), Mr. Paul Chan, has delivered his third budget on Wednesday, 27 February 2019.
Our coverage includes a commentary and analysis in response to the Budget prepared by the Deloitte Hong Kong Budget Team, led by Ms. Sarah Chan, Tax Partner of Deloitte China, and a summary highlighting the key proposals.
Hong Kong budget conservative yet practical amid economic uncertainty and reduced government revenue
On 27 February 2019, Hong Kong's Financial Secretary Paul Chan delivered a conservative, practical budget that manages public finances in response to reduced government revenue and prepares Hong Kong for emerging economic uncertainties.
Hong Kong continues to invest substantially in innovation and technology development, and offers short-term relief measures, albeit at a reduced scale, for citizens. If economic challenges continue to intensify, the government might start to face pressure to spend its fiscal reserves. This means it needs to adopt an approach that strikes a balance between investing for the future and adhering to its long-held principle of fiscal prudence.
Summary of Tax Measures
Hong Kong Tax News
Issue 90 - 27 February 2019
Financial Secretary of the Hong Kong Special Administrative Region, Mr. Paul Chan Mo-po, delivered the 2019/20 budget speech this morning. A surplus of $58.7 billion is expected for 2018/19 and fiscal reserves to reach $1,162 billion by 31 March 2019. This Tax Newsflash summarized the major proposals with respect to tax for individual and business.
- Tax concessions / Relief measures
- Arrangements to stimulate economy and business
- Expand global market coverage
Various external headwinds, including trade friction between China and the US and volatility in global financial markets, have started to impact the Hong Kong economy. In the 2019/20 Budget, the Financial Secretary announced a wide range of measures with a view to supporting enterprises, safeguarding jobs, stabilizing the economy and strengthening livelihoods. In particular, the 2019/20 Budget aims to enhance Hong Kong's competitive edge as a financial hub for multinational corporations, foster the development of maritime industries and seize opportunities from the direction and strategies of China's economic development by leveraging Hong Kong's distinctive advantages.
The surplus of HKD58.7 billion for FY2018/19, down from HKD148.9 billion for FY2017/18, is mainly a result of lower-than-expected revenue from land premiums and stamp duty. We welcome the government's demonstration of its clear vision for Hong Kong's economic development through various proposed initiatives to further promote the financial services industry and support the development of innovation and technology. Although the public had been expecting more sweeteners, short-term stimulus measures and increased public expenditure, the 2019/20 Budget can be viewed as conservative yet practical.