Several measures were announced to encourage businesses to modernise their plant and equipment and to increase spending on research.
Mr Tsang said the measures would be an incentive to achieve higher productivity and find ways to add higher value. They include: A 100 per cent write-off on plant and machinery for manufacturing, computer hardware and software and systems development; Doubling the annual depreciation allowance for commercial buildings from two per cent to four per cent in line with the rate for industrial buildings; Extending the hotel refurbishment concession introduced in 1996-97 to all other business sectors. Mr Tsang said: 'This will provide incentive to encourage them to maintain and upgrade the standards and quality of premises regularly.' Capital expenditure on refurbishment and redecoration will be eligible for amortisation over a period of five years, based on a 20 per cent straight-line annual write off.
KPMG Peat Marwick partner Roddy Sage said: 'His proposals are not limited to a simple cut in the corporate rate but are also aimed at encouraging modernisation . . . his new measures are intended as incentives to all businesses.'