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HKICPA makes recommendations for the government’s budget to meet the goal of a sustainable future for Hong Kong

18 January 2022

(HONG KONG, 18 January 2022) Today, the Hong Kong Institute of Certified Public Accountants (“HKICPA”) has announced its tax policy and budget proposals for 2022-23. Under the theme "Building a Sustainable Future for Hong Kong, its Economy and Community" HKICPA puts forward more than 40 measures, including both immediate and longer-term measures. These are aimed at maintaining the city’s competitive edge, ensuring a sustainable tax system, rolling out relief measures to help businesses and citizens ride through these challenging times, and helping Hong Kong achieve the goal of carbon neutrality by 2050.


HKICPA estimates that the fiscal deficit for 2021/22 will reach HK$25.2 billion. This is significantly less than the government’s original estimation of over HK$100 billion, as a result of better-than-expected economic performance in the second half of 2021 and robust land sales, which indicates that developers have an optimistic outlook for the property market in the coming few years. Fiscal reserves are expected to stand at HK$902.6 billion as at 31 March 2022.


“Despite these positive signs, the situation remains very uncertain”, says Loretta Fong CPA (Practising), President of HKICPA. “The COVID-19 pandemic, particularly the rapidly spreading Omicron variant, is affecting the global economy and impacting Hong Kong, and the government has recently announced a series of new social distancing measures over fears of a new community outbreak. To deal with this and other ongoing challenges, our proposals recommend that the government adopt a number of specific short-term relief measures, while, at the same time, enhancing the Hong Kong economy by promoting digital transformation, and building on the opportunities presented by the development of the Greater Bay Area (GBA). More also needs to be done to maintain our competitive edge and build a sustainable future,” Ms. Fong emphasized.


Community and targeted relief measures


With inbound tourism at a virtual standstill, continuing travel restrictions and limitations on group gatherings still in place, businesses in a number of sectors continue to face operational difficulties, including cash flow problems. These problems will be exacerbated by the latest pandemic restrictions.


“To help alleviate the pressures on businesses and individuals, we propose, among other measures: the introduction of a tax loss carryback scheme, to help businesses badly affected by the pandemic carry back their losses to a previous year where they made profits; a new round of the Consumption Voucher Scheme, amounting up to HK$3,000 for each eligible citizen, to further stimulate local consumer spending and support the retail sector; and a reduction in salaries tax and tax under personal assessment and profits tax of 100%, up to a ceiling of HK$20,000,” explained Sarah Chan FCPA, Chairman of the Taxation Faculty Executive Committee.


HKICPA also proposes introducing a home rental allowance of up to HK$100,000 annually – initially on a temporary basis.


Together, these measures can help to put money back into the pockets of companies and individuals.


Revitalizing Hong Kong’s economy


The vitality and business performance of small and medium enterprises’ (“SMEs”) are of crucial importance to the development of Hong Kong’s economy. However, many SMEs face unprecedented challenges due to COVID, while support in the development of innovation and technology for SMEs is also patchy. Businesses often seem to be unaware of the subsidy schemes that are available for them.


Digitalization has become an especially important issue for SMEs in the post-COVID world. The acceleration of digital transformation is not without challenges. While there are various information technology (“IT”) support schemes to help SMEs digitalize, we believe there is scope for increased consolidation, promotion and outreach to companies.


HKICPA proposes the setting up of a one-stop shop for all the government IT funding programmes. A new measure to provide SMEs with a subsidy to hire an IT specialist, covering 50% of the employment cost (up to a ceiling of HK$16,000 per month) for 36 months should also be introduced. This would be a mutually beneficial arrangement for companies and individuals, for example recent IT graduates.


“To help capitalize on opportunities in the GBA, we suggest relaxing the restrictions on claiming depreciation allowances for certain plant and machinery (P&M), deductions of capital expenditure for the purchase of intellectual property rights (IPR) for use within the GBA, as well as allowing the enhanced deductions for qualifying research and development (R&D) work conducted by Hong Kong businesses in the GBA. While currently there are some restrictions on claims where P&M are used, or relevant R&D work is conducted, outside Hong Kong, we believe that, if the government really wants to encourage greater cooperation and integration with the GBA, then they should treat the GBA as a special case.”, said Eugene Yeung CPA, Convenor of Budget Proposals Sub-Committee.


HKICPA also suggests establishing a dedicated and flexible GBA fund to support development of the Hong Kong professions in the GBA.


The government should also consider tax incentives to targeted industries, such as IT businesses and green industries, to enhance the competitiveness of Hong Kong’s economy and build for the future.


Comprehensive review of the Hong Kong tax system


The latest developments in the international tax landscape, including the European Union’s (EU) review of harmful tax practices and the Organization for Economic Cooperation and Development’s Base Erosion Profit Shifting (“BEPS”) 2.0 project, have brought about significant challenges to Hong Kong’s simple and low-rate tax regime. These developments bring two aspects which primarily affect large multinational companies. BEPS 2.0’s Pillar 2 in particular, which relates to the right to further tax corporate income that is subject to an effective tax rate below 15%, will affect Hong Kong’s low-rate tax regime. Meanwhile, the EU review could require modifications to Hong Kong’s territorial, source-based based system. 


Hong Kong must align itself with international rules, including implementing the Pillar 2 proposals, and addressing the EU’s concerns about harmful tax practices. However, the aim should be to minimize the impact of any changes on businesses that are not within scope, and on the tax system generally.


“Taxpayers want to plan ahead on matters that could significantly affect their profitability, so they need to be kept abreast of the government’s plans in this regard. Given the global developments that directly affect us, various other pressures on the local tax system, and the need to ensure our long-term competitiveness, we continue to recommend that a more extensive review of the tax system should be carried out,” Mr. Yeung added.


Given the likely impact of developments in international taxation, HKICPA also suggests that the government should review Hong Kong’s promotion strategies, and consider offering more non-tax incentives and subsidies. 


Environmental measures to achieve carbon neutrality


The 26th UN Climate Change Conference, (COP26), was held in Glasgow in October 2021. The conference led to an agreement calling on countries to strengthen their 2030 emissions reduction targets. The Glasgow Climate Pact emphasized the urgent need to accelerate efforts to turn targets into action to keep the limit on the global average temperature rise of 1.5 degrees Celsius within reach. In the 2020 Policy Address, Hong Kong’s chief executive already stated the government’s commitment towards achieving carbon neutrality by 2050. The Environmental Bureau has recently released Hong Kong's Climate Action Plan 2050 (“CAP”) under which the government will, inter alia, pursue more vigorous interim decarbonization targets.


Against this background, HKICPA proposes incentives for the complete replacement of polluting commercial vehicles, and the expansion of the “EV-charging at Home Subsidy Scheme” for electric private cars, as the current plan is already over-subscribed. “The CAP notes that buildings account for about 90% of Hong Kong’s total electricity consumption, and that over 60% of Hong Kong’s carbon emissions are attributable to generating electricity for buildings. “To encourage improved energy usage, we propose offering accelerated industrial and commercial building allowances for green, energy-efficient buildings”, Ms. Chan explained.


Besides these proposals, HKICPA suggests various measures to encourage the adoption of good environmental, social and governance practices and sustainable finance, as well as examine the feasibility of green taxation, and incentives for better energy and resource conservation.


The HKICPA’s proposals include ideas for promoting better fitness and health among the public.


The full budget proposal "Building a Sustainable Future for Hong Kong, its Economy and Community" is available at






香港會計師公會就財政預算案提出建議 冀實現香港可持續發展的目標

(香港,2022年1月18日) 香港會計師公會(「公會」) 今天發表以「為香港建立可持續發展社區和經濟」為題的2022/23年度稅務政策及財政預算案建議。建議內容涉及40多項短期及長期措施。有關建議旨在保持香港的競爭優勢確保可持續的税制推出協助企業和市民的紓困措施並協助香港於 2050 年達致碳中和。
















對中小企而言數碼化成為後疫情一個重要課題。現時雖然已有一定數量的資訊科技(IT) 資助計劃協助中小企數碼轉型但公會相信仍有整合推廣以至接觸更多企業的空間。


公會建議為所有政府的IT資助計劃進行整合和提供一站式服務。公會亦提議一項新措施,為中小企提供為期 36 個月的資助,聘用一位資訊科技專才,資助將涵蓋僱用成本的50%(上限為每月16,000港元)。相關的公司及個人(例如應屆畢業的科技人才) 將受惠於計劃。


公會財政預算案建議委員會召集人楊澤志會計師表示:「為幫助企業把握大灣區的機遇公會建議容許納稅人扣除份於大灣區內使用的租賃機械及工業裝置(P&M) 所產生的折舊免稅額對於納稅人購買並於區內使用的知識產權(IP)的相關的資本支出亦可作扣税。另一方面為於大灣區內進行並由香港公司控制的研發活動 (R&D) 所涉及開支提供額外稅務扣減。雖然現階段在香港以外使用的P&M所牽涉的折舊免稅額不視為扣稅項目及在海外進行R&D的開支不可作為額外稅務扣減但公會相信如政府希望鼓勵加強與大灣區的合作和融合可將大灣區視為特別例子。」








由於國際稅務形勢的最新發展包括歐盟(EU) 就損害性稅務的審查和經濟合作與發展組織「(OECD)」公佈國際稅務改革框架方案 - 「稅基侵蝕及利潤轉移」(BEPS) 2.0項目令香港現行簡單、低稅制帶來重大挑戰。BEPS 2.0由兩條支柱組成影響大型跨國企業。其中支柱二(Pillar Two) 針對相關稅務管轄區進一步徵稅的權利例如若受控外國實體在某稅務管轄區的實際稅率低於全球最低稅率(15%)集團的母公司需向所在地就差額繳納額外稅款。這項改變將影響香港的低稅率制度。此外歐盟的審查亦可能要求修改香港的地域來源徵稅制度。


香港應考慮與國際規則接軌包括實施支柱二方案,解决歐盟對本港「損害性稅務措施」的擔憂。 然而應盡量減輕對不在受影響範圍的業務和稅收制度的影響。







根據202110月在英國格拉斯哥舉行的聯合國氣候變化大會COP26達成的協議各國需在2030年實現更大幅度的減排。《格拉斯哥氣候協定》強調目前迫切需要加強力度切實執行目標限制全球平均氣溫上升幅度於攝氏1.5度以下。在2020年施政報告中香港特區行政長官已表明政府對2050年達致碳中和的承諾。根據環境局最近發佈的《香港氣候行動藍圖2050(CAP) 政府將追求更積極的中期減碳目標。


在此背景下公會建議提供誘因鼓勵更換污染環境的商用車輛。由於現時推行的《EV屋苑充電易資助計劃》反應熱烈公會建議進一步擴大計劃。「此外,建築物的用電量佔全港約 90%因此所需發電而產生的碳排放量則佔全港排放量超過60%。」 陳女士解釋:「為鼓勵改善能源效益,公會建議為綠色節能建築提供更多工商業建築免稅額。」


除上述建議外公會還建議採取不同措施,鼓勵採用良好的環境、社會和管治 (ESG) 以及可持續金融,並審查綠色稅收的可行性,以及提供誘因鼓勵更具效益的能源和資源使用。




「為香港建立可持續發展社區和經濟」2022/23預算案提出的建議全文已上載 (只有英文),以供參閱。