• Wed
  • Sep 24, 2014
  • Updated: 11:48am
NewsHong Kong
BUDGET

PwC pushes for tax breaks, relief measures in Hong Kong budget

PwC expects a HK$28.7b surplus and calls on John Tsang to provide some relief measures

PUBLISHED : Wednesday, 09 January, 2013, 12:00am
UPDATED : Wednesday, 09 January, 2013, 5:17am

A top accounting firm urged the government to offer more tax concessions and relief measures in the budget as it forecast a surplus of up to HK$28.7 billion in the current financial year, thanks to a windfall from land sales.

PricewaterhouseCoopers said land revenue would be boosted by HK$20 billion in the first quarter of this year. It expects profits and salaries tax to bring in about HK$165.9 billion, while revenue from stamp duty would fall from HK$44.4 billion to HK$37.8 billion. It also expects fiscal reserves to reach HK$697.8 billion - equivalent to 21 months of government spending.

Financial Secretary John Tsang Chun-wah will review his forecasts for the 2012-13 financial year in his budget speech to be delivered next month.

The firm also proposed incentives to encourage owners to use environment-friendly vehicles and machinery to cut pollution. "Given diesel commercial vehicles are the main source of roadside pollution, the government should introduce 30 per cent incentives for replacing pre-Euro and Euro 1 and II diesel commercial vehicles," said Jeremy Choi Heng-chio, PwC Hong Kong tax partner, referring to European emission standards introduced in 1992 and 1996.

The government should also provide a 200 per cent tax deduction on environment-friendly machines and installations, he said. Among other measures, PwC suggested a profits tax exemption for all short, medium and long-term bonds and expansion of the current profits tax exemption for foreign funds to Hong Kong resident funds and private equity funds.

PwC estimated the full-year surplus would reach HK$28.7 billion, the most optimistic assessment among major accounting firms. Ernst & Young put it at HK$8.6 billion while Deloitte estimated a deficit of HK$10 billion.

PwC tax partner So Kwok-kay said most of the surplus would be accounted for by record income from land sales. The firm did not favour another cash handout like the HK$6,000 given last year but believed relief measures would be introduced to address livelihood, land and inflation issues.

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22gt7
Given the 2digit billion surplus for the year ended 31.3.2013, it would only be fair for the Government to return of all salaries tax and personal assessment tax for the year of assessment 2012/13 to all taxpayers who have for years been shouldering most of the tax burden of Hong Kong. Do not be stupid again to consider waiving the public housing rent again as these people, envied by most Hongkongers, have been enjoying the low rent which is subsidized by taxpayers.
 
 
 
 
 

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