Analysis
Hong Kong SAR Budget 2025/2026
Deloitte's Commentary
The Financial Secretary of the Hong Kong Special Administrative Region (HKSAR), Paul Chan Mo-po, delivered the 2025-26 Budget Speech on 26 February 2025. This is the third budget he has presented under the current-term Government led by HKSAR Chief Executive John Lee Ka-chiu.
Our coverage includes a commentary and analysis in response to the Budget prepared by the Deloitte Hong Kong Budget Team, led by Ms. Polly Wan, Lead Partner of Hong Kong Budget Team of Deloitte China, and a summary highlighting the key proposals.
Press Release
The 2025-26 Hong Kong Budget: Advancing economic growth with reform and innovation
Deloitte China welcomes the series of measures in today’s Hong Kong SAR Budget 2025-26 delivered by Financial Secretary Paul Chan, which aim to enhance competitive industries while unleashing “new quality productive forces” to accelerate economic growth. The Government expects a fiscal deficit of HKD87.2 billion for the FY2024-25, with fiscal reserves projected to be HKD647.3 billion by 31 March 2025. While adhering to the principle of prudent financial management, the Government anticipates achieving a balanced operating account from FY2025-26 onwards, with a return to fiscal surplus in the coming years.
Learn more: [English version] [Simple Chinese version] [Traditional Chinese version]
Deloitte's Commentary
The Financial Secretary of the Hong Kong Special Administrative Region (HKSAR), Paul Chan Mo-po, delivered the 2025-26 Budget Speech today, outlining the fiscal policy for the upcoming year amidst challenging economic times. This marks the third budget he has presented under the current-term Government led by HKSAR Chief Executive John Lee Ka-chiu. It strikes a balance between addressing fiscal deficits and fostering economic growth.
The Financial Secretary announced a HKD87.2 billion fiscal deficit for the 2024-25 financial year (FY2024-25), marking a modest decrease from HKD100.2 billion in FY2023-24 but still significantly higher than the initially estimated deficit of HKD48.1 billion in last year's Budget Speech. This discrepancy is attributed to the geopolitical tensions affecting capital flows, and consequently, government revenues from land sales, stamp duty on property transactions declined. With fiscal reserves expected to drop to HKD647.3 billion as of 31 March 2025, the government is tasked with strengthening public finances while also striving to promote economic expansion.
In the Budget, the Financial Secretary balances fiscal responsibility with economic stimulus, focusing on controlling expenditure and enhancing revenue streams through meticulously designed measures. This strategy, aimed at tackling the fiscal deficit and solidifying public finances, creates an environment conducive to economic diversification and technological advancement, paving the way for a stronger and more resilient economic outlook for Hong Kong.
This article examines the tax-related initiatives announced and assesses their implications for individuals and businesses.
Media coverage
Deloitte China Tax Director Jackie Wong and Tax Manager Jeffrey Siu co-authored an article titled "Opportunities and Challenges for Hong Kong in the AI Era." They welcome the Government's adoption of Deloitte’s proposals to review tax deductions for intellectual property (IP) in this year’s Budget, with a view to establishing Hong Kong as a regional IP hub by promoting innovation and knowledge transfer.
7 March 2025
Chinese only: Ming Pao
A Closer Look - The boundary facilities fee
4 March 2025
Chinese only: TVB News
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