Hong Kong Budget 2016 / 2017

The Financial Secretary, Mr John Tsang, presented his ninth and probably the last government budget to Legislative Council on 24 February 2016.

The Financial Secretary points out that there is a slowing down of Hong Kong economy and growing tensions in society. Hong Kong is now facing stiff competition in the global market and must get itself prepared and maintain strengths through research and application of innovative technologies, development of financial technologies, start-ups and the creative industries, as well as fostering of suitable talents.

The Financial Secretary further added that 2016 marks the start of the National 13th Five-Year Plan and the implementation of the Belt and Road Initiative. By leveraging the combined advantages of “one country” and “two systems”, Hong Kong can serve as a platform for Mainland enterprises to “go global” and at the same time as a “super-connector” to attract foreign technologies and investment. However, uncertainties in the external environment will continue to impact on Hong Kong.

In his budget, Mr Tsang proposed an array of tax relief and support measures, including reducing 2015-16 salaries tax and tax under personal assessment, increase allowances for salaries tax and tax under personal assessment, increasing deduction ceiling for elderly residential care expenses, waiving rates for the whole year, etc. Mazars Hong Kong welcome these measures and believe that such measures will help easing the economic burden of and thus improve the lives of the general public.

Given the soaring rent and labour costs in Hong Kong, Hong Kong is getting more and more difficult for entrepreneurs to start up new businesses. The existing businesses particularly the SMEs who are also struggling for their survivals are facing a number of economic uncertainties ahead, e.g. slackening in tourist spending, weak import demand from advanced economies, etc. SMEs are the backbone of the Hong Kong economy accounting around half of the total employment. Mazars Hong Kong also welcome the Financial Secretary’s positive response to Mazars’s recommendations to provide more assistance to SME and to support SMEs’ development.