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HKICPA supportive of broad direction of budget – but questions specific measures and effectiveness of existing funds to drive change

28 February 2018

The government's budget offers relief to many, but not all

(Hong Kong, 28 February 2018) The government's 2018-19 budget reflects a good year for Hong Kong's economy and offers a positive outlook for the near and medium-term, which is to be welcomed. Still, it could have included more specific measures to improve the competiveness of the tax system, as well as to help both the less fortunate in society and small and medium sized enterprises (SMEs), according to the Hong Kong Institute of Certified Public Accountants (HKICPA).

"We support the direction the government is heading in as regards investing in the future, but more could be done to make clearer how this will be implemented in practical terms," says Mr. So Kwok Kay, Chairman of the Institute's Taxation Faculty Executive Committee, "We see the budget as carrying forward the policies in Chief Executive Carrie Lam's first policy address last October. However, we hoped the Financial Secretary would offer additional specific measures and a clearer insight into policy implementation."

Money set aside
While there were many measures offered to promote research and development (R&D) and SMEs, much of the funding dedicated to such projects was earmarked for existing funds – which are not easily accessible to those who need the funding. "More should be done to provide direct access to government funding," argues Mr. Curtis Ng, Convenor of Budget Proposals Sub-committee of HKICPA. "The money on offer is important for helping Hong Kong to diversify its economy but the government must reduce the red tape businesses face in obtaining funding," he continued.

"We would also like to have seen greater practical flexibility in the tax incentives for R&D and use of intellectual property to encourage innovation and start-ups in Hong Kong," added Mr. So.

Community efforts

"Widening the tax bands and adding a new band will help reduce the tax burden on the middle income group, a group which has long been calling out for more support," says Mr. Ng. "The increases in some of the salaries tax allowances, including child and dependent parent/ grandparent allowances, and the deduction for elderly residential care expenses, will also be welcomed." However, the HKICPA would like to see a review and rationalization of all these different allowances and the way in which they are adjusted.

On other community efforts announced, HKICPA is pleased to see measures announced which it has long called for, including tax deductions for private healthcare insurance, supporting voluntary MPF contributions and allowing for married couples to elect individually for personal assessment. "The government must support individuals saving for their future and taking responsibility for their health, so we are glad they have offered measures towards these goals and look forward to seeing the relevant legislation," said Mr. Ng.

HKICPA is also glad to see more support for electric private vehicles, and specifically the higher ceiling on the waiver of first registration tax when owners trade in an internal combustion engine car for a new electric car. "We called for something similar in our pre-budget submission because wider usage of electric vehicles is vital to improving the air quality in Hong Kong," says Mr. So. "By tying the subsidy to the disposal of existing private cars we hope the policy will not lead to an increase in overall traffic on the roads," he continued.

Housing and high property prices remain huge issues for the community, according to HKICPA. We wish the government offered more support to renters of private housing in addition to the announced policy waiving government rates for property owners.

Measures still needed
The HKICPA hoped that the new government would undertake a review of the tax system, and ensure that tax revenues are predictable and that tax rules are clear. "We are disappointed that the Financial Secretary has not proposed a broader review of the tax system, as this is overdue and the HKICPA has long been calling for a review to consider the overall competitiveness of the tax system, and raised issues such as broadening the tax base in Hong Kong," said Mr. So.

There was little offered directly to the so-called "N have-nots households", those low income households not in public housing or receiving Comprehensive Social Security Assistance. "The Financial Secretary expects Hong Kong to go through an extended period of strong growth and we hope that this economic prosperity can improve the lives of all in the community," said Mr. Ng.


 

香港會計師公會支持財政預算案整體方向
但具體措施及現有基金成效存疑

政府財政預算案惠及不少市民,但未能讓所有階層受惠


(香港,二零一八年二月二十八日)香港會計師公會認為政府二零一八至一九財政年度預算案反映這年香港經濟向好,能為本港中短期帶來正面作用,公會對此表示歡迎。然而,預算案欠缺提升稅制競爭力及扶助社會弱勢市民和中小型企業的實質措施。

香港會計師公會稅務師會執行委員會主席蘇國基先生表示:「公會認同政府投資未來的方向,但認為須要提供更多落實的細節。我們認為預算案將行政長官林鄭月娥去年十月公佈的首份施政報告內的政策向前推進了。但公會期望財政司司長能就政策落實提供更詳細資料。」

財政資源分配
預算案中建議了多項措施推動研究及發展和輔助中小企,但用於相關項目的大部份資金劃撥至現有基金,而需要資助的人士或企業卻未必能輕易從基金取得資助。公會財政預算案建議委員會召集人伍耀輝先生說:「政府須要採取措施使資助更加直接。這些財政援助對香港經濟多元發展十分重要,政府應簡化程序讓企業能更便捷取得資助。」

蘇先生補充說:「公會希望政府能放寬研發及使用知識產權相關的稅務優惠限制,藉以推動香港的創新發展及初創企業。」

 

民生措施

伍先生說:「擴闊及新增稅階將有助減輕中產市民的稅務負擔,這是中產階層一直的訴求。我們亦歡迎政府提高薪俸稅免稅額,包括子女及供養父母/祖父母免稅額,以及增加長者住宿照顧開支的扣除額。」然而,公會希望政府能有系統檢討這類免稅額及調整方式。

公會樂見預算案中提出了多項公會一直倡議的民生措施,包括私人醫療保險稅務扣減、鼓勵強積金自願性供款,以及容許已婚夫婦選擇以個人入息課稅方式計稅。伍先生說:「政府須鼓勵市民為未來儲蓄及為個人醫療籌謀,我們很高興政府提出相關措施,並期待相關立法展開。」

公會亦歡迎政府加強電動車相關的措施,特別是為以內燃引擎車輛更換為電動車的車主提高首次登記稅寬免額。蘇先生說:「公會在預算案建議中提出相類意見,更廣泛使用電動車是改善本港空氣質素的關鍵。我們希望與銷毀現有私家車掛鈎的補貼方式,不會導致路面車輛數量增加。」

公會認為住屋成本及樓價高企仍是本港社會的重大問題。我們希望政府除了減免業主差餉的措施外,亦要為租住私人房屋的市民提供更多支援。

仍須加強的措施

公會希望新一屆政府能檢討本港的稅制,提高稅收的可預測性,同時令稅例更清楚明確。蘇先生說:「香港現行稅制已不合時宜,公會對財政司司長沒有提出檢討整體稅制表示失望,公會一直倡議檢討香港稅制,提升香港稅制的整體競爭力,以及探討拓濶稅基等稅務事宜。」

財政預算案能惠及俗稱「N 無住戶」(即非領取綜合社會保障援助的公屋低收入住戶)的措施不足。伍先生說:「財政司司長預期香港長遠增長穩健,公會希望正面的經濟展望能改善市民的生活。」


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