BUDGET 2015: Tax cuts among HK$34 billion relief measures ‘to ease financial burden’

At least 1.8 million taxpayers will benefit from a 75 per cent reduction in salaries tax, capped at HK$20,000, Financial Secretary John Tsang Chun-wah announced in his budget speech today.

Profits tax will be reduced by the same amount, benefiting 130,000 taxpayers, while 3.15 million private property owners will also see rates waived for the first two quarters of this year to next year – subject to a HK$2,500 ceiling.

The rebates are among some HK$34 billion in relief measures aimed at “alleviating the financial burden on the public” and will be reflected in the final tax payable for last year to this year.

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In his speech, Tsang said he was aware that citizens were expecting the relief measures from the government in view of the unstable and challenging global macroeconomic and economic factors and the government’s “relatively sound fiscal position in the short to medium term”.

Tsang forecast a surplus of HK$63.8 billion for the financial year ending next month – about six times his original projection.

“I shall increase public expenditure in a prudent manner according to the principle of committing resources as and when justified and needed,” he said. But he added that recurrent and one-off measures served different purposes and were not “interchangeable”.

“[One-off relief measures] serve counter-cyclical objectives to provide cushioning effects for the economy and alleviate imminent economic hardships,” he added.