(2013-2014 Budget) Middle-class, business get help
(02-27 13:00)
Financial Secretary John Tsang Chun-wah said budget measures costing HK$33-billion to help middle-class families and businesses.
They include tax breaks for individuals and companies, and higher child allowances.
Tsang said middle-class families should be given some support, and a reduction on salaries tax would be extended.
But high earners may see their tax bills increase, because the cap on tax rebates has been lowered by HK$2,000 to HK$10,000.
The total value of the one-off relief measures is less than half of last year's HK$80 billion, despite the government enjoying a surplus of nearly HK$65 billion - about the same as last year. More than 1.5 million taxpayers will benefit. Basic and additional child allowances will be raised from HK$63,000 to HK$70,000. The allowance for babies born in the coming fiscal year will go up to HK$140,000.
The electricity subsidy of HK$1,800 per household will be extended. Property rates for the coming fiscal year will be waived up to a ceiling of HK$1,500 a quarter, meaning 75 percent of properties will be excluded from paying rates. This will cost the government HK$11.6 billion in lost revenue - making it the most expensive one-off measure.
Public housing tenants will receive a two-month rent waiver. Welfare recipients will get an additional one-month handout.
The tax deduction on self-education expenses will be raised from HK$60,000 to HK$80,000.
For businesses, registration fees will be waived, benefitting 1.2 million company owners. They will also receive a 75-percent tax reduction capped at HK$10,000. About 120,000 companies which pay profits tax will benefit. The Financial Secretary said a tax rebate, instead of a reduction in profit tax rates, would allow Hong Kong to maintain its simple tax regime.
The total value of the one-off relief measures was sharply lower than last year's HK$80 billion, as the government recorded a budget surplus of HK$64.9 billion in the current fiscal year.
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