Chief executive candidate John Tsang touts tax breaks for SMEs, allowances for low-income families
Popular underdog in the leadership race proposes ‘two-tier’ approach to taxation to lessen the burden on new businesses.
Such a tax regime would help develop the city’s financial, tourism and innovative industries, he said when unveiling his election platform on Monday.
He also floated the idea of a “negative income tax”, or allowance, to help low-income families.
Tsang, the popular underdog in the leadership race and formerly the city’s financial chief for almost a decade, also suggested making developers create extra floor space in new residential and commercial projects to accommodate homes for the elderly or child care centres.
Leaders of the business and social welfare sectors welcomed Tsang’s proposals, but a veteran tax consultant said clear guidelines were needed to avoid abuse of the “two-tier” tax regime.
Tsang’s recommendations came a day after the front runner in the race, Carrie Lam Cheng Yuet-ngor, who used to be a rank above him as chief secretary, said she would not carry any baggage when it came to tax reform. Lam had vowed that her administration would prioritise business convenience and help the needy.
Setting out his vision, Tsang promised to study the feasibility of a progressive profits tax that would encourage the development of start-ups and SMEs, “spur reinvestment, and enhance SMEs’ competitiveness”.