Tien tax relief call snubbed

Financial Secretary Paul Chan Mo-po has brushed aside a proposal to offer a tax reduction to landlords who reduce rents for tenants, calling it a complicated issue and open to abuse.

Roundtable lawmaker Michael Tien Puk-sun made the proposal to the SAR finance chief, with Chan saying the suggestion needed to be studied, as retail sales plunged 44 percent year on year in February - the largest ever slide.

Tien, who owns fashion chain G2000 group, said business in his stores in February plunged 70 percent year on year, while sales in March fell further by 80 percent year on year.

But Tien said "the worst is yet to come," adding April's figures could see further plunges if the pandemic becomes more serious and the government introduces tougher restrictions.

Chief Executive Carrie Lam Cheng Yuet-ngor on Tuesday called on landlords to reduce rents, but Tien criticized the move as "all bubbles, no beer."

He said offering a profit tax relief to landlords who are willing to reduce rents is a better way.

Tien suggested that if the landlords are willing to slash rents by half, they could receive a triple profit tax reduction and would only lose 20 percent of rental incomes after tax. If landlords lowered rents by 70 percent, they would only lose 40 percent of rental incomes after tax.

Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, also urged landlords to halve rents.

Tse, chairwoman of the Tse Sui Luen jewelry company, said she expects a 30 to 50 percent drop in retail figures for the first half of this year.

She added that everything hinged on the pandemic's duration and the base figure of last year as to whether the figure would keep falling.

Although some landlords have reduced rents for tenants, the reductions were 10 to 20 percent at most, Tse said.

She called on landlords to consider halving rents and maintaining cheaper rents until at least June, otherwise many employees could lose their jobs as well as affecting the economy.

Meanwhile, Lei Garden restaurant, which owns a one Michelin star restaurant, said that, in view of the current pandemic and to reduce social contact among customers, all of its 11 branches across the SAR will be closed until April 15 effective yesterday.