More resources allocated to relieve people’s hardship and provide SMEs with some breathing space so as to stabilise the economy and maintain public confidence
Hong Kong’s Financial Secretary Paul Chan Mo-po announced on Wednesday (February 23, 2022) the city’s latest budget that included HK$170 billion to support the economy and fight the pandemic. Hong Kong’s economic growth is forecasted at between 2-3.5% in 2022 with inflation around 2%. The budget centred around four themes including resources to fight against the epidemic, relief the hardship of the people and SMEs, driving post-pandemic recovery and investing in the future for the medium- and long-term development of the economy.
There are a number of measures targeted at businesses and individuals, in the budget, including:
Tax changes, rates and fees for Businesses
Taxes on profits will be reduced by 100% for businesses, capped at HKD$10,000. There will be rate concessions for non-domestic properties for 2022-23 and a 75% waiver of water and sewage charges for non-domestic users. Business registration fees will be waived and fees of 34 government services will also be extended, or given concessions, until October 2023. Extension on 75% rental or fee concessions until September 2022 to eligible tenants of government premises was also announced.
Help for Enterprises
The existing Special 100% Loan Guarantee Scheme will be extended for one year until June 2023. Eligible SMEs will be allowed to borrow up to HK$9 million instead of HK$6 million, and repay only interest but no principal, for 10 years instead of 8. A rental enforcement moratorium will be introduced to allow tenants from specific sectors to delay payments to Hong Kong’s property developers for six months maximum, subject to Legislative Council’s approval. Once in effect, developers will not be allowed to chase tenants for rent.
Support for individuals
There will be 100% reduction in 2021/22 salaries tax for individuals, capped at HK$10,000, with other support measures including rate concessions for residential properties, electricity subsidies for rate payers, and tax assessment reduction for renting homes, capped at HK$100,000 per year. Moreover, the pandemic-relief personal loan guarantee scheme will be extended to April 2023, with the maximum amount increased from six to nine times that of the applicant’s monthly income, capped at HK$100,000.
To boost the economy, permanent residents and new immigrants aged 18 or above will be given HK$10,000 consumption vouchers in two instalments, with the first instalment of HK$5,000 to be handed out in April.
The Hong Kong Mortgage Corporation will enable first-home buyers to borrow up to 90% of property value up to maximum of HK$10 million, up from HK$8 million; or borrow up to 80% up to maximum of HK$12 million, up from HK$10 million.
The government will invest HK$10 billion in Hong Kong-listed and non-listed tech firms including start-ups and those in biotechnology, via the Hong Kong Growth Portfolio, the sovereign investment fund. They will also invest HK$10 billion in the development of life science technology.
Subsidies in the Innovation and Technology Fund will be doubled to HK$440 million to attract local and overseas talent and HK$85 million is allocated to enhance intellectual property protections.
Other significant parts of the budget centred around fighting against the epidemic and speeding up development of the Northern Metropolis.
For more information on the Hong Kong budget, please contact Alpadis Group.