Hong Kong SAR Budget 2021/2022
The Financial Secretary for the Hong Kong Special Administrative Region (HKSAR), Mr. Paul Chan, has delivered his fifth budget on Wednesday, 24 February 2021.
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 to help reboot economy
Rise of the new economy across Greater Bay Area can refresh Hong Kong's competitive advantage
On 24 February 2021, Financial Secretary Paul Chan Mo-Po presented his 5th Hong Kong budget speech against the backdrop of a second year of economic contraction, this time due to COVID-19, announcing an expected budget deficit of HKD257.6 billion for 2020/21 and anticipated fiscal reserves of HKD902.7 billion by 31 March 2021. With the unemployment rate continuing to rise and an uncertain economic outlook due to COVID-19, the Financial Secretary rolled out some special measures amid the economic downturn.
Summary of Tax Measures
Hong Kong Tax News
Financial Secretary of the Hong Kong Special Administrative Region, Mr. Paul Chan Mo-po, delivered the 2021/22 budget speech today. A deficit of $257.6 billion for 2020/21 is expected and fiscal reserves to reach $902.7 billion by 31 March 2021. This Tax Newsflash summarized the major proposals with respect to tax for individual and business.
The Financial Secretary of the Hong Kong Special Administrative Region, Paul Chan Mo-po, delivered his 2021-22 Budget speech today. This is the 5th budget prepared by Mr. Chan since his appointment as Financial Secretary.
The Financial Secretary forecasts the highest fiscal deficit in Hong Kong's history of HKD257.6 billion for the financial year (FY) 2020-21, against the backdrop of successive shocks including China-US tensions, local social incidents and the COVID-19 pandemic. This prompted a drastic decline in fiscal reserves to about HKD902.7 billion as of FY-end. The surge in the deficit for FY2020-21 from HKD37.8 billion in FY2019-20 was mainly due to relief measures via the Anti-epidemic Fund, sharp falls in revenue from land premium, and a rise in recurrent Government expenditure.
The 2021-22 Budget was prepared with a view to buffering the impact of economic recession on society and people’s livelihoods, and paving the way for the post-pandemic economic recovery. Mr. Chan took a balanced approach in providing support for people’s imminent needs amid the COVID-19 pandemic, while ensuring the stability of Hong Kong’s public finances and financial system, and the sustainability of its economy. Similar to last year, the budget did not introduce many tax measures.
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.