Information courtesy of the European Chamber of Commerce in Hong Kong

On the 23 February, Hong Kong's Financial Secretary, the Honourable Paul MP Chan, delivered the 2022-2023 Budget speech to the Legislative Council. Chan announced that the HK$170 billion budget will be focused on the following four themes: equip the city with sufficient resources to fight against the epidemic; relief for citizens and SMEs; support the economy amid downturn and drive post-pandemic recovery; and investing in the future and deploying medium and long-term economic development. 2021 Economic Snapshot GDP Growth: 6.4% Unemployment rate: 5.2%, undermployment rate: 2.5% Headline inflation: 1.6%, underlying inflation: 0.6% A surplus of HK$18.9 billion is estimated at the end of the 2021-22 fiscal year after a deficit a year ago. Future Outlook Growth estimated at 3 per cent annually in medium term per annum from 2023-24 to 2026-27. There is an estimated deficit of HK$56.3 billion for the 2022-23 fiscal year. Tax Policies Revision of the property tax system for the first time since 1995 will allow owners of residential properties to apply for tax rebates for oneself-owned property only, saving the government HK$3.1 billion on rate concessions. By 2024-25, a new tax system in which tax rates increase with a property’s rateable value will be implemented, affecting approximately 42,000 properties and increasing the government revenue by HK$760 million per year. Reduction of salaries tax and tax under personal assessment for 2021-22 by 100%, subject to a ceiling of HK$10,000. COVID-19 Measures The government will introduce a measure to allow SME tenants of Hong Kong’s property developers to delay payments for up to six months. 30,000 time-limited jobs to be created under anti-epidemic fund. New round of HK$10,000 consumption vouchers confirmed for eligible Hong Kong permanent residents and new arrivals aged 18 or above. Pandemic-related relief packages will cost the government HK$64 billion, with an additional HK$20 billion to support residents and businesses affected. The budget allocation will include spending on COVID-19 testing and support for the Hospital Authority, procurement of vaccines, environmental hygiene services, and the construction of anti-epidemic facilities. Industry Support HK$1.26 billion will be allocated to revive and develop the tourism industry. The Government will set up a HK$5 billion Strategic Tech Fund to invest in technology enterprises and projects of strategic value under the Future Fund. HK$100 billion from the Future Fund will be used to set up a dedicated fund to expedite works under the Northern Metropolis. HK$10 billion will be allocated to developing life science technology, improving hardware, upping research manpower, and conducting clinical trials. The Government will launch the Pilot Green and Sustainable Finance Capacity Building Support Scheme and the Pilot Scheme on Training Subsidy for FinTech Practitioners. A comprehensive breakdown of the budget is available on the government website here.