Tax rebate helps but it's not enough, say critics

PUBLISHED : Thursday, 26 February, 2009, 12:00am
UPDATED : Thursday, 26 February, 2009, 12:00am

All 1.4 million people who pay salaries tax will benefit from a one-off rebate of 50 per cent this financial year, subject to a ceiling of HK$6,000.

The measure was among several proposed in the budget to relieve the public's burden during the difficult financial times.

But political parties and taxpayers said the financial secretary did not do enough to alleviate hardship.

The salaries tax rebates will cost the government about HK$4.1 billion and will be deducted from the next tax bills. About 490,000 taxpayers would receive the maximum rebate of HK$6,000, the Inland Revenue Department estimated.

Financial Secretary John Tsang Chun-wah said: 'Taxpayers were offered a rebate of up to HK$3,000 during Sars. We think HK$3,000 may not be enough.

'It cannot be compared to what we did last year. The series of measures put forward last year was aimed at sharing the fruit of economic success with the public. But the situation is very different this year.'

Mr Tsang also proposed waiving rates for the first two quarters of 2009-10, up to a ceiling of HK$1,500 per quarter for each rateable property. It is estimated that about 90 per cent of domestic properties and 60 per cent of non-domestic properties will be free of rates. Another relief measure was a 20 per cent rental reduction for most government properties and certain short-term tenancies of government land for three months.

More than half of the 17,000 beneficiaries will be tenants renting units in public market buildings. As for short-term tenancies, a certain type of tenant, such as recyclers and NGOs, will enjoy the rent cut, while supermarkets and petrol station operators will not.

Also proposed was an extension of the freeze on some fees and charges - such as water charges and application fees for passports, driving licences and identity cards - until the end of March next year.

Alvin Lee Chi-wing, chairman of Voice of the Middle Class, said more concessions, such as waiving rates for a year, should have been offered. 'The budget is too conservative and with reserves forecast to stand at HK$488 billion, there is room for more concessions.'

Both the Democratic Alliance for the Betterment and Progress of Hong Kong and the Association for Democracy and People's Livelihood said there were insufficient relief measures for the lower class.

But Patrick Kwong Shu-wing, council member of the Taxation Institute, said Mr Tsang's more prudent approach was understandable.