taxes

Politics

Budget 2019/20: Tax reduction and financial relief measures not to be compromised despite lower revenue

  • The Young Reporter
  • By: Vimvam Tong、Jo Ng、King Woo、Yetta LamEdited by: Rachel Yeo
  • 2019-02-27

The government announced a number of financial relief measures in the budget speech today, despite a significant drop in the city's annual surplus. Salaries tax, tax under personal assessment and profits tax will be reduced by 75% with a ceiling of $20,000 this year, Financial Secretary Paul Chan Mo-po said. Mr. Chan said he is "very concerned about the tax burden on salary earners", adding that tax bands will be widened and marginal tax rates will be adjusted. "These measures aim to relieve the long-term tax burden of citizens through a structural approach and increase taxpayers' disposable income, so that they can take better care of their personal as well as family needs," he said. The government will be waiving rates for four quarters of 2019-20, subject to a ceiling of $1,500 per quarter for each rateable property, wheres last year's ceiling was $2,500. One-off relief measures from the government this year are projected to be lesser because of the reduced surplus. Mr. Chan announced the expected surplus of $58.7 billion for 2018-2019, but the government will be spending approximately $42.9 billion for 2019-2020, which is 73% of the surplus for one-off relief measures. This figure is higher than last year, when they allocated around 40% of the $138 billion surplus for relief measures. "We consider that the external environment is not very favorable, so the surplus is lower. But we do not want to scale down our commitment (towards relief measures) too much," said Mr. Chan in the press conference after the budget speech. Financial relief measures are introduced with the objectives to “support enterprises, preserve employment, stabilise economy, and alleviate the burden of citizens", in reaction to the slow economy performance caused by the US-China trade war. As for allowances, the government will also be providing extra allowances …