Deloitte forecasts a fiscal surplus of $500 million for the 25/26 fiscal year

The government is expected to record a HK$500 million surplus in the 2025/26 fiscal year, compared to the HK$67 billion deficit estimated by the government last February, reflecting a more robust financial health, according to Deloitte.

Anthony Lau, managing partner of the Southern Region at Deloitte China, said the surplus is supported by stock stamp duty revenue and investment returns. Deloitte China's Hong Kong Budget Team projected fiscal reserves to be approximately HK$ 654.8 billion by the end of March 2026, equivalent to approximately 10 months of government expenditure.

Lau urged a comprehensive tax review and a focus on policy measures that can attract global investments and talents to Hong Kong, welcoming foreign companies listed on the local stock market and encouraging high-net-worth individuals and asset managers to establish operations locally.

Deloitte also proposed a tax deduction of 150 percent to cover interest expenses and professional fees for companies issuing bonds to support the development of the Northern Metropolis Area.

The firm recommended a 100 percent cut in salaries tax and personal assessment tax with a cap of HK$5,000 for this fiscal year. It also called for a 10 percent increase in the personal tax allowance in 2026-27 to HK$145,200, up from HK $132,000, as the current allowance has remained unchanged for the previous 10 years.

Gloria Leung