SNAPSHOTS OF HONG KONG BUDGET 2023/2024
On 22 February 2023, the Financial Secretary of the Hong Kong SAR Government, the Honourable Paul MP Chan, unveiled Hong Kong’s 2023-24 Budget with numerous initiatives aimed to support Hong Kong’s post-Covid-19 pandemic economic recovery as the city moves forward under challenging heightened geopolitical tension.
Themed as “Leaping Forward Steadily, Together We Bolster Prosperity under Our New Vision”, Mr. Chan provided a comprehensive summary of the economic performance in 2022, and the outlook for 2023 including Government spending and revenue forecast. The Hong Kong fiscal reserves had been reduced by approximately HK$340 billion over the past three years due to the economic downturn and various measures implemented to support citizens and businesses during the Covid-19 pandemic. Despite that, Hong Kong’s fiscal reserves remain healthy at an estimated HK$817.3 billion as at 31 March 2023. With the borders now reopened and most Covid-19 pandemic measures removed, the Government aims to seize opportunities and prepare Hong Kong for economic revival.
The 2023-24 Budget outlines the Government’s latest tax and fiscal policy with direct support measures and resources allocation to pursue economic growth, and provides relief to the community. Measures include a 100% reduction of profits tax and salaries tax for the year 2022-2023, subject to a cap of HK$6,000 ceiling respectively. A new round of electronic consumptions vouchers of HK$5,000 will also be distributed to eligible residents in two phases starting from April 2023.
The Government has also rolled out other key initiatives to provide more funding to support the development in terms of innovation and technology, finance, trade such as the Digital Transformation Support Pilot Programme to assist SMEs in adopting digital solutions, the CreateSmart Initiative to support the creative industries, and to provide additional funding to the Hong Kong Trade Development Council to assist enterprises in opening up markets to capture opportunities from the Belt and Road initiative and Hong Kong’s strategic position in the Greater Bay Area.
The 2023-24 Budget set up the pathway for recovery and at the same time, to consolidate and further strengthen Hong Kong’s position as a top-tier international finance and business center by providing more targeted incentives and public policies to attract businesses and investors to be based in Hong Kong to drive sustainable economic growth.
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© March 2023. This article is contributed by Acutus Tax & Corporate Services Limited. All rights reserved