• Sun
  • Jul 13, 2014
  • Updated: 3:57pm

Surplus will be at least $10 billion, say experts

PUBLISHED : Friday, 24 February, 2006, 12:00am
UPDATED : Friday, 24 February, 2006, 12:00am

Higher-than-expected income from land premiums and stamp duty could inflate the government's budget surplus to at least $10 billion when the final results for this financial year are reported in May or June.


This will be more than double the $4.1 billion consolidated surplus estimated in Wednesday's budget by Financial Secretary Henry Tang Ying-yen, according to preliminary projections from tax experts.


Their forecasts ranged from less than $5 billion to $28 billion, but the current consensus is for the government to report a sizeable surplus of between $10 billion and $15 billion.


In 2004-05, the administrationrealised a surplus of $21.4 billion, or $9.4 billion more than its budget forecast of $12 billion. This final figure includes proceeds from issuing the $6 billion Toll Revenue Bond and $20 billion of government bonds in 2004.


Taxation Institute of Hong Kong president Richard Chow Yeung-tuen said Mr Tang's latest forecast assumed the government received no more revenue from charging land premiums between January and March this year, which was unlikely.


He also stressed that stamp duty should come in better than expected given the healthy stock market turnover 'unless something disastrous happens in March'.


So far, stamp duties have reached roughly $9 billion for equities and stocks, and more than $6 billion for property transactions. The government is sticking to its original forecast of $16.3 billion in stamp duty.


Figures also show that about $6.5 billion in land premiums was collected in the nine months ending December 31, 2005.


PricewaterhouseCoopers tax partner Marcellus Wong Yui-keung said land premium income should continue to flow into public coffers unless the government chose to defer these payments.


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