Analysis
Hong Kong SAR Budget 2021/2022
Media Coverage
More relief measures expected following economic recovery, while scaled back budget sweeteners are understandable
1 March 2021, Ming Pao
Alfred Chan, Tax Director; Jackie Wong, Senior Tax Manager
In response to the 2021/22 Hong Kong SAR Budget, Deloitte China Tax Director Alfred Chan and Tax Senior Manager Jackie Wong contributed an article to Ming Pao on 1 March 2021, stating that this year's relatively scaled-back sweeteners are understandable while calling for more relief measures once the economy improves. The Financial Secretary Paul Chan forecast record-high budget deficit of HKD257.6 billion for 2020/21 and anticipated fiscal reserves of HKD902.7 billion by 31 March 2021, as the pandemic has dampened the outlooks for local and global markets. In light of the huge deficit and economic downturn, Deloitte believes the HKSAR government should uphold fiscal prudence and at the same time provide relief packages to support those in need.
Deloitte's response to HKSAR Budget 2021/22: Measures to further enhance the local innovation ecosystem
24 February 2021, HKEJ, metroradio.com.hk, AASTOCKS, Quamnet
Edward Au, Southern Region Managing Partner; Sarah Chan, Tax Partner
"Advancing the development of the Hong Kong-Shenzhen Innovation and Technology Park, as part of the Government's wider support for GBA development, can further enhance the local innovation ecosystem, and increase the GBA's appeal to entrepreneurs and people to work cross-border. Hong Kong, as a renowned international financial hub, plays a pivotal role in green and sustainable finance within the GBA, and this will create job opportunities, especially for young talent who are keen to expand their horizons across different industries. As a firm, it is vital that we upskill our young talent for future professional growth. We are committed to continuing to support the career development of Hong Kong youth and their prospects within the GBA," says Edward Au.
Addressing GBA development, Sarah Chan urges the government to map out the details of tax incentives for key industries, including finance, insurance, technology and biotech, as it seeks to stimulate the local market and pave the way for Hong Kong's economic recovery. The government should also ensure Hong Kong remains one of world's foremost international financial centers and plays a crucial role in the development of the GBA, by attracting companies to settle and raise capital in Hong Kong, which can provide a long-term solution to unemployment. "These tax incentives, along with Hong Kong's superior business environment for technology, innovation and entrepreneurship, will attract more job opportunities and start-ups to establish themselves in Hong Kong" Chan says.
Hong Kong Gives HKD120 Billion Boost to Economic Recovery
24 February 2021, Bloomberg
Sarah Chan, Tax Partner
The Financial Secretary proposed raising the stamp duty on stock trading to 0.13% from 0.1% to boost revenue. Sarah Chan points out that transaction costs are just one factor that affects investor behavior and says the stock market should continue to perform well. "However, we strongly recommend that the government continue to review the impact of this measure," she adds.
Hong Kong to raise stamp duty on stock transaction by 30%
24 February 2021, hkcna.hk, Caixin, HKET
Alfred Chan, Tax Director
Alfred Chan states that stamp duty is just one of the many factors affecting stock market activity. Despite the economic impact of COVID-19, the local bourse has rallied on recent inflows of southbound capital. As the revenue from stamp duty on stock transactions is expected to be about HKD33.2 billion this year, the increase in stamp duty to 0.13% will bring additional revenue of around HKD10 billion, according to Chan. He adds that raising the stock trading stamp duty to tackle the deficit is a viable approach, as it will have a relatively small impact on businesses and people's livelihood.
Hong Kong to introduce new loan guarantee scheme for unemployed capped at HKD80,000
24 February 2021, Caixin
Alfred Chan, Tax Director
The Financial Secretary proposed setting up a loan scheme to support the unemployed, adding that the government would commit to a total guarantee of HKD15 billion. The maximum loan amount per applicant is set at six times their average monthly income when they were in work, subject to a cap of HKD80,000. Alfred Chan says the extra financing can help the unemployed by improving their cash flow amid the economic downturn.
Government to issue HKD5,000 electronic consumption vouchers
24 February 2021, Apple Daily
Sarah Chan, Tax Partner
Sarah Chan says the electronic consumption vouchers is a form of "lucky money" which should be welcomed by Hong Kong citizens after last year's HKD10,000 cash handout. She believes the vouchers can boost consumption and might even prove more effective than cash handouts in stimulating the local economy and propelling the development of new consumption models. Chan notes that senior citizens who are unfamiliar with technology might struggle to use the vouchers, and urges the government to release detailed guidelines to ensure the program objectives are met.
Supporting Hong Kong people to explore GBA opportunities through tax incentives and public transport subsidy
22 January 2021, HKEJ
Doris Chik, Tax Director; Carmen Cheung, Tax Manager; Kiwi Fung, Senior Tax Consultant
Hong Kong is renowned as an international financial and trade centre, with a simple and low tax regime. In recent years, the HKSAR Government has introduced a range of tax incentives to attract investment and spur growth in key development areas, including corporate treasury centres, funds, insurance, aviation and marine leasing, R&D, etc. While Hong Kong is stepping up to ensure its tax system remains attractive, developments in the international tax scene have presented significant challenges to the city.
Supporting Hong Kong people to explore GBA opportunities through tax incentives and public transport subsidy
21 December 2020, Ming Pao
Ellen Tong, Tax Director; and Carol Chung, Tax Senior Manager
With the continued development of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), the HKSAR Government has been furthering the city's position within the GBA and encouraging more Hong Kong companies and talent to develop in the region, with a view to facilitating the flow of talent and helping companies explore bigger market and business opportunities. The HKSAR Government also encourages Hong Kong people to consider retiring to cities in Guangdong and Fujian where they can enjoy lives in spacious surroundings. Deloitte therefore suggests that the HKSAR Government provide tax relief measures and financial subsidies to Hong Kong businesses, employees and taxpayers in the GBA.
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