Hong Kong Budget 20/21 published: take-aways

Yesterday, 26 February Financial Secretary of the HKSAR Government, Mr. Paul Chan, published his 2020/2021 Budget.

In a nutshell, new relief measures for supporting enterprises include:

  • introducing a concessionary low-interest loan under the SME Financing Guarantee Scheme, under which 100% guarantee will be provided by the Government.  The application period will last for six months.  The maximum amount of loan for eligible enterprises is based on their salary and rental expenditures for six months, subject to a ceiling of $2 million.  The repayment period is up to three years and, on an opt-in basis, a principal moratorium is available for the first six months during which only interest payments have to be made.  The Government will provide guarantee of up to $20 billion under this concessionary loan scheme.
  • reducing profits tax for the year of assessment 2019/2020 by 100 per cent, subject to a ceiling of $20,000.
  • waiving the business registration fees for 2020/2021.
  • waiving the registration fees for all annual returns (except for late delivery) charged by the Companies Registry for two years.

Our experts from Fidinam Group Worldwide have highlighted here below the main measures, chapter by chapter.

Relieve Burden

  • Cash payout $10,000 cash payout to Hong Kong permanent residents aged 18 or above
  • Reduce salaries tax and tax under personal assessment for 2019-20 assessment year by 100%, subject to ceiling of $20,000
  • Additional annual funding of $30 million to enhance Labour Department employment programmes. Raise ceiling of on-the-job training allowance
  • Reduce profits tax for 2019-20 assessment year by 100%, subject to a $20,000 ceiling
  • Waive rates for non-domestic properties for 2020-21, subject to a ceiling of $5,000 per quarter in first two quarters and $1,500 per quarter for remaining two quarters
  • Rental for Government properties/ properties covered by short-term and temporary waivers: 50% reduction for 6 months

    Diversified Economy

    • Lower minimum entry age of the HKMC Annuity Plan from 65 to 60
    • Launch a $1 billion pilot scheme for fixed-rate mortgages to help reduce risks of interest rate volatility for homebuyers
    • Earmark $3 billion to take forward Phase 2 of the Science Park Expansion Programme
    • Explore the establishment of a third InnoHK research cluster
    • Inject $345 million for a pilot subsidy scheme to encourage the logistics industry to enhance productivity through the application of technology
    • Additional funding of over $700 million for the Hong Kong Tourism Board to step up external promotion after the epidemic
    • Additional $900 million to the Art Development Matching Grants Scheme to further promote sponsorship of culture and arts from all sectors
    • Earmark $40 million to subsidise short-term internships for undergraduates and postgraduates taking STEM programmes in local universities

Liveable City

  • Formulate Hong Kong’s first roadmap on the use of electric vehicles
  • Launch a $2 billion pilot scheme to subsidise the installation of charging-enabling infrastructure in car parks of private residential buildings
  • Earmark no less than $300 million per year to implement waste paper collection and recycling services in the second half of 2020, to help stabilise the quantity and price of local waste paper
  • Announce the Smart City Blueprint for Hong Kong 2.0 this year to further promote smart city development
  • Earmark $1 billion for the Smart Traffic Fund to subsidise research and application on vehicle-related I&T
  • Allocate $100 million to develop an integrated digital platform for data integration and information exchange in order to strengthen project supervision
  • Launch a territory-wide 3D digital map in phases from this year. Earmark $60 million to establish the first Geospatial Lab to promote the application of spatial data
  • Launch the “iAM Smart”, a one-stop personalised digital service platform, in the fourth quarter of this year

Healthcare system

  • Earmark about $500 billion for the two 10-year Hospital Development Plans, providing over 15 000 additional hospital beds and more than 90 operating theatres to meet projected service demand up to 2036
  • Provide sufficient financial support for the Hospital Authority (HA) and the Department of Health for anti-epidemic efforts
  • Provide recurrent funding of $75 billion to the HA in 2020-21, an increase of 35% from 2017-18
  • Allocate about $180 million to universities to enhance facilities and strengthen professional healthcare training

Land and Housing

  • Potential land supply of 2020-21 Land Sale Programme, railway property development projects and private development/ redevelopment projects expected to provide about 15 700 units. Another 6 commercial sites estimated to provide floor area of about 830 000 sqm

Find the complete budget release here

Willing to know more about how to benefit from the new budget measures? Contact our professionals today!

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