Hong Kong Government’s New Multi-Billion Dollar Relief Measures

26 August 2019

On 15 August 2019, the Financial Secretary of Hong Kong announced a number of relief measures (worth of approximately HKD 19.1 billion) to support businesses, safeguard jobs and relieve people’s financial burdens.

The relief measures relevant for enterprises as well as middle-class and upper-class individuals include the following:

(i) Tax reduction

In addition to the 75% tax reduction capped at HKD 20,000 on salaries tax, tax under personal assessment and profits tax for the year of assessment 2018/19 proposed by the Financial Secretary of Hong Kong in the 2019-20 budget, the tax reduction will increase from 75% to 100% while retaining the ceiling of HKD 20,000 pursuant to the new relief measures.

The proposed tax reduction is subject to passage by the Legislative Council, which is expected to be in October 2019. The Hong Kong Inland Revenue Department will then issue the tax demand notes, taking into the account of the enhanced tax reduction, for the year of assessment 2018/19 to taxpayers.

(ii) Reduction/waiver of government fees, charges, rental and other supports

The Government will:-

  • waive 27 groups of government fees and charges, such as vehicle/vessel license/ permit fees, port facility usage fees, restaurant/food shop/food permit license fees, hotel/guesthouse license fees and travel agent license fees, for 12 months to benefit a wide range of business sectors such as maritime, logistics, retail, catering, tourism, construction, agriculture and fisheries;
  • reduce rental fees by 50% for most short-term tenancies of government land for community and business use for 6 months;
  • make further enhancement to the Dedicated Fund on Branding, Upgrading & Domestic Sales and SME Export Marketing Fund as well as inject additional funds thereto with a view to support enterprises in exploring business opportunities and promoting sales;
  • introduce a new loan guarantee product under the SME Financing Guarantee Scheme, under which the Government will provide for approved loans a 90% guarantee to help individuals looking to set up new businesses as well as business with relatively less operating experience;
  • extend the application period of the special concessionary measures under the SME Financing Guarantee Scheme, under which the Government provides for 80% guarantee for approved loans, to 30 June 2022; and
  • implement a moratorium on the Government fees and charges, which are set on a cost recovery basis with immediate effect until 31 December 2020.
If you have any questions regarding the above or other tax matters, please do not hesitate to contact us on +852 2804 0889 or by email taxservices@hkwj-taxlaw.hk.
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