Auzzi Shopping

Men's Weekly

.

CPA Australia: Hong Kong Budget - Bold steps needed for economic boost

  • Written by Auzzi Shopping
  • 100 per cent increase in tobacco duty, consider a tax on non-recyclable plastic products
  • Offer a two-tiered e-consumption vouchers with a target disbursement period in the first half of 2023, with HK$2,000 as the base amount for all eligible Hong Kong residents, and an additional HK$6,000 for underprivileged groups (in total HK$8,000)
  • Maintain the HK$10,000 tax rebate on salaries tax and increase tax allowances

HONG KONG SAR - Media OutReach - 15 February 2023 - One of the largest professional accounting bodies globally, CPA Australia, has released its recommendations for Budget 2023-24 to revitalise the economy and create a better future. With an estimated HK$126 billion fiscal deficit for the financial year 2022-23 and HK$820 billion of remaining fiscal reserves, CPA Australia believes Hong Kong needs bold action to attract talent, improve the environment and boost the economy.


"Hong Kong's economy is expected to rebound this year along with the resumption of cross-border travel and easing of COVID-19 restrictions," Anthony Lau, Co-Chairperson of CPA Australia's Taxation Committee – Greater China said.

"However, volatility, uncertainty and inflation pressures weigh on the recovery. We want the government to re-establish Hong Kong on the world stage, while improving public finances."

Building sustainable public finances, promoting a green society

"Following three years of the pandemic, building a healthy and liveable society for Hong Kong residents is a priority. We want measures that create a better living environment," Mr Lau said.

CPA Australia wants the tobacco duty increased to reduce smoking rates and alleviate the burden on public healthcare system. A 100 per cent increase in tobacco duty will generate around HK$8 billion in additional revenue in 2023-24. Further, the government should consider a tax on non-recyclable plastic products to reduce plastic consumption and waste.

"Hong Kong's simple and low tax system is important to attracting companies and investment. We want the government to work with Mainland authorities to enhance the Hong Kong-Mainland of China Double Tax Arrangement (DTA) and help distinguish Hong Kong from regional competitors. This could include reducing the dividend withholding tax rate."

"We want the capital investment entrant scheme reintroduced and eligibility expanded to Chinese nationals. Alternatively, the government could introduce an immigration program that provides residency status to investors making investment in strategic industries."

Encouraging SME transformation

Mr Janssen Chan, Co-Chairperson of CPA Australia's Taxation Committee – Greater China said e-consumption vouchers have helped many SMEs digitally transform in the past two years.

"To build on that momentum, we suggest the government relaunch and increase funding to the Distance Business Program to help more businesses digitalise and expand their online presence.

"Though we need to start moving away from an expansionary approach in the budget, a modified version of the e-consumption voucher scheme could be considered for Hong Kong residents, with a focus on supporting lower-income earners, if the government considers the economic conditions require it.

"Government measures over the past two years have helped many SMEs stay afloat but uncertainty continues. We want measures like the Special 100 per cent SME Financing Guarantee Loan Scheme and the Pre-approved Principal Payment Holiday Scheme extended by one year."

"To address the manpower shortage issue, the government can assist is to improve the chances of younger generations being able to buy a home in Hong Kong by helping with a down payment.

"Given SMEs are particularly struggling to attract and retain talent, the government may consider offering an additional tax deduction on salaries expenditure for companies hiring employees aged 60 or over, which is another pool of top talent."

Reducing cost of living pressures, improving living standards, attracting talent


Theresa Chan, Deputy Chairperson of CPA Australia's Taxation Committee – Greater China said Hong Kong residents were facing higher costs, particularly hurting low-income earners.

"To help ease cost pressures we want the HK$10,000 tax rebate on salaries tax maintained. Personal allowance, child allowance and married person's allowances should be increased. The government should also consider increasing the salaries tax allowances at least in line with inflation."

We also recommend an energy bills subsidy to assist with rising prices.

"To prepare for an ageing tsunami and to alleviate the burden on the public health system, we suggest increasing the cap on tax deductions for voluntary contributions to the MPF scheme to HK$100,000 and the Voluntary Health Insurance Scheme (VHIS) to HK$12,000 respectively. For taxpayers who are not policyholders of the VHIS, we suggest introducing a tax deduction on unreimbursed medical and health check expenses from private healthcare providers up to HK$12,000."

"To attract talent to work and stay in Hong Kong, we suggest enhancing the Top Talent Pass Scheme by reducing the salaries tax rate for successful applicants by 50 per cent for the first two tax years, subject to a cap of HK$1.2 million of income."

For live Budget Day commentary on 22 February, call our hotline: 2202-2722 / 5318 9655.

Hashtag: #CPAAustralia

The issuer is solely responsible for the content of this announcement.

About CPA Australia

CPA Australia is one of the largest professional accounting bodies in the world, with more than 170,000 members in over 100 countries and regions, including more than 22,200 members in Greater China. CPA Australia has been operating in Hong Kong since 1955 and opened our Hong Kong office in 1989. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at

Today's Features at Auzzi

Sock Fabrics Decoded: Cotton, Polyester, Nylon and the Blends That Work

Choosing sock fabric shapes how your feet feel through school runs, sport and weekends. The fibre mix sets comfort, durability and how quickly sweat moves away from skin. That matters for ...

Why Industrial Electrician Melbourne Services Are Essential for Modern Businesses

Factories, warehouses, and large-scale facilities rely on complex electrical networks to power machinery, lighting, and technology. To keep these systems safe and efficient, businesses tur...

The Importance of Professional Air Conditioning Services for Homes and Businesses

Air conditioning has become an essential part of modern living, especially in Australia where summers bring extreme heat and winters can be unexpectedly cold. But installing a system is ju...

Electrician Sydney: Trusted Electrical Services for Homes and Businesses

Electricity powers modern life, from lighting and appliances to data networks and industrial equipment. When it comes to installation, repairs, and maintenance, hiring a licensed electrici...

3 Essential Home Services You Should Always Hire a Professional For

Looking after a home is rewarding, but it often comes with challenges that test patience, time and skills. While painting a wall or assembling new furniture may be manageable, certain househ...

Essential Home Maintenance Tips to Keep Your Property Safe and Comfortable

Owning a home comes with a mix of pride and responsibility. Regular maintenance is crucial not only to preserve the value of your property but also to ensure it remains a safe and comfortabl...

How to Protect Your Home While Boosting Efficiency

Creating a home that is both secure and efficient requires thoughtful planning and practical upgrades. Many Australian homeowners underestimate the benefits of combining safety with energy e...