HK should adopt innovative taxes for revenue growth, says CPA Australia

Hong Kong should develop innovative targeted taxes to increase revenue and reduce costs, according to CPA Australia.

The recommendations come as the accounting body estimates that the Hong Kong administration will record a budget deficit of HK$96.1 billion for the financial year 2024-25 and fiscal reserves of HK$638.5 billion as of March 2025.

It urges the administration to unveil strategic taxes, such as a carbon tax on corporations emitting over 25,000 tonnes of carbon dioxide and a digital service tax on certain digital service providers’ revenue from Hong Kong users.

To attract more investment from funds and family offices, CPA Australia recommends further enhancing unified fund tax exemption and single family office tax concession regimes, including listing Hong Kong real estate investments as tax-exempt assets. 

Additionally, it also suggests that the administration increase the income threshold for the half profits tax rate from HK$2 million to HK$3 million in a bid to support small and medium enterprises.

CICI CAO