Government coffers are expected to be flush with cash at the end of the financial year, with stamp duty and investment income boosting the budget surplus to HK$26.9 billion, according to accounting firm PricewaterhouseCoopers.
Much of the surplus would come from spending cuts of about HK$14.2 billion. Stamp duty would be about HK$6.2 billion higher than forecast thanks to the active stock market. Improved returns on investment income would also contribute to the projected surplus.
The forecast far exceeds the HK$5.5 billion surplus the government originally estimated. The firm said the surplus could climb as high as HK$30 billion, depending on circumstances in the final few months of the financial year.
Richard Chow Yeung-tuen, president of the Taxation Institute of Hong Kong, said he was optimistic the surplus would not be less than last year's HK$14 billion.
Discounting the capital works reserve and other funds, which can be used to manipulate the size of the budget surplus or deficit, Hong Kong General Chamber of Commerce chief economist David O'Rear believes this year's figure could easily reach HK$28 billion.
If achieved, it would fuel growing public calls for tax cuts and other relief measures, Democratic Party legislator Fred Li Wah-ming said. But PricewaterhouseCoopers tax partner Tim Lui Tim-leung said Financial Secretary Henry Tang Ying-yen would need to 'look at the big picture. He will be cautious in giving back'.
