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HKICPA's response to the government's 2022-2023 Budget

23 February 2022

(Hong Kong, 23 February 2022) – The Hong Kong Institute of Certified Public Accountants (HKICPA) welcomes the government's Budget 2022-2023 and believes that the government is actively helping the public cope with the pandemic and tackle the economic downturn.

 

HKICPA is pleased to note that the government has taken into account numerous recommendations made by HKICPA earlier, such as tax rebates, tax deductions on residential rental expenses, issuance of consumption vouchers, tax incentives for single-family offices, injecting additional funds into the EV-charging at Home Subsidy Scheme, holding an investment summit, and aligning Hong Kong's tax policy with international tax rules.

 

HKICPA welcomes targeted relief measures to help tide the community over difficult times

 

Recently, the COVID-19 outbreak in Hong Kong has taken a turn for the worse and has dealt a significant blow to people's livelihoods. HKICPA welcomes the introduction of a slew of relief measures, including HK$10,000 consumption vouchers, to mitigate the negative impact of COVID-19 on businesses and individuals, such as closures and layoffs.

 

Given the global economic uncertainty, "It's hard to say when the pandemic will be under control, and Hong Kong still has to fight a 'protracted battle'. In addition to issuing consumer vouchers to the public, we believe that the government should focus on providing more targeted short-term measures to those currently in need of assistance. This can maximize the societal benefits given the limited resources." said Loretta Fong CPA (practising), President of HKICPA.

 

According to the Financial Secretary, the government expects to book a surplus of around HK$18.9 billion in 2021-2022, which is much better than the government's forecast at this time last year of HK$101.6 billion deficit. The fiscal reserves are expected to stay at about HK$946.7 billion at the end of the current administration. The government forecasts that fiscal reserves will gradually return to more than HK$1 trillion in five years, equivalent to around 16 months of expenditure. This represents a good step towards a more healthy financial standing in the medium-term.

 

"As the current outbreak is more severe than expected, finding ways to boost the economy and relieve people's hardship is of utmost urgency. Since the consumption voucher scheme proved effective in stimulating local consumption, adding that, as revenue was significantly better than expected last year, it will not create a long-term burden on the coffers. Moreover, the experience and information gained from the distribution of vouchers last year will help simplify procedures, speed up the process and minimize administrative costs." said Sarah Chan FCPA, Chairman of the Taxation Faculty Executive Committee.

 

Improving tax system to stabilize the economy in the long run

 

The strength of Hong Kong's overall public finances depends heavily on whether the local outbreak can quickly be brought under control. The economy could be hit hard if the conditions worsen, thereby adversely affecting the government's revenue sources.

 

HKICPA remains concerned about Hong Kong's fiscal resilience in the medium to long term and for some years has advocated broadening the tax base to mitigate the impact of changes in the economic cycle and unforeseeable shocks on the public purse, as well as an aging population. In this regard, HKICPA understands the rationale behind the government’s proposed reform of the property rating system, as rates are a fairly broad-based form of taxation, with a view to making those with greater means pay more.

 

"The rating system has not been substantially updated over the years, and we believe that the introduction of a progressive rating system will help increase government revenue. The underlying impact of a progressive rating system depends on the specifics of how it is implemented, and further public consultation should be conducted on this proposal before it is finalized. As for any possible impact on property prices, these are determined by many factors, including supply and demand, and market sentiment.” said Eugene Yeung, Convenor of HKICPA's Budget Proposals 2022-23 Sub-Committee.

 

In addition to optimizing the rating system, Mr. Yeung believes that the government should still comprehensively review Hong Kong's public revenue model to address the narrow tax base.

 

With regard to the development of the international tax system, HKICPA suggested earlier that the government should amend relevant legislation to implement Pillar 2 of the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting (BEPS) 2.0 proposals, while minimizing the impact on Hong Kong's existing tax system.

 

The government announced that it would introduce BEPS 2.0 proposals into the Legislative Council in the second half of this year. The proposals aim to ensure that relevant multinational companies (MNCs) pay a certain minimum level of tax globally. HKICPA believes that ensuring that relevant MNCs based in Hong Kong pay any top up here will not only increase the government’s revenue, but will also protect Hong Kong's taxing rights, while maintaining its tax and business competitiveness.

 

Pathways to net-zero carbon emissions


HKICPA supports the government's sustainability strategies highlighted in the Budget, and is pleased to see additional funding of HK$1.5 billion injected into the EV-charging at Home Subsidy Scheme and its extension for four years to 2027/28.

 

The renewed subsidy scheme will cover a total of about 140,000 parking spaces in approximately 700 existing private residential buildings.

 

In addition, to support the objective of net zero carbon emissions by 2050, HKICPA urges the government to consider providing enhanced allowances for energy-efficient industrial and commercial buildings.

 

Other comments

 

Other comments on the Budget by the HKICPA include the following:

 

●     Green and sustainable finance: The government plans to issue further retail green bonds next year. HKICPA believes the expansion of the government's green bond issuance will help alleviate the government's financial pressure and support sustainable development, in line with the environmental, social and governance (ESG) trends in global markets.

 

●     Single-family Office: We welcome the government's proposal to provide tax relief to eligible family investment management entities managed by a single-family office, and to consult with the industry as soon as possible. To enjoy the relevant tax incentives, HKICPA has recommended earlier that eligible family offices should have an annual operating expenditure of at least HK$2 million and employ at least two employees.

●     Supporting start-ups and tech investment: In supporting start-ups and technology investments, we welcome the government's establishment of the HK$5 billion Strategic Tech Fund and Digital Economy Development Committee. While acknowledging these measures, HKICPA suggests that the government may also consider providing tax credits for start-up companies and lowering their profits tax rates, for up to five years.

●     Fostering digital transformation of small and medium enterprises and their operations: HKICPA proposes consolidating all government innovation and technology-related funding schemes into a one-stop shop. We also propose relaxing the restrictions on claiming depreciation allowances for certain plant and machinery deductions of capital expenditure for the purchase of intellectual property rights for use within the Greater Bay Area (GBA).

 

●     Business support: HKICPA welcomes the introduction of a series of measures to help businesses tide over the immediate difficulties caused by the pandemic, such as the extension of the Pre-approved Principal Payment Holiday Scheme for corporate customers for six more months to the end of October this year. We also hope that the government will consider introducing a temporary tax loss carryback scheme for the fiscal years 2021/22 and 2022/23, to mitigate the impact of the economic slowdown.

●     Talent development: HKICPA welcomes the government's talent development strategy. This includes launching the Pilot Green and Sustainable Finance Capacity Building Support Scheme and the Pilot Scheme on Training Subsidy for FinTech Practitioners, which will provide internship and training opportunities for young people and facilitate their career development in Hong Kong.

 

●     Mainland Development Support Scheme: HKICPA welcomes the allocation of HK$135 million over the next three years to the Mainland Development Support Scheme. We believe that this scheme will help Hong Kong individuals and businesses further explore development opportunities in the GBA.

 

 

 

 

香港會計師公會回應政府二零二二至二零二三年度財政預算案

 

(香港,二零二二年二月二十三日)香港會計師公會歡迎政府的二零二二至二零二三年度《財政預算案》,認為特區政府正面地從抗疫紓困及增加收入兩大範疇,在疫情肆虐及經濟下滑情況下協助市民應對困境。


政府的建議包括香港會計師公會早前提出多項建議,包括退稅、設立住宅租金開支扣除、發行消費、就單一家族辦公室提供稅務寬免、向「EV屋苑充電易資助計劃」注資、舉行投資峰會及使稅收政策銜接國際稅收規則。

 

疫情嚴峻 公會歡迎政府集中抗疫及紓解民困的方向

 

香港疫情近月轉趨惡化,嚴重打擊香港經濟及民生。香港會計師公會歡迎政府積極推出包括新一輪10,000元消費券計劃及稅項寬減在內的措施,以減低企業倒閉、裁員引起的即時負面效應。

鑒於現時全球經濟前景未明,香港會計師公會會長方蘊萱執業會計師表示:「疫情難言何時受控,香港仍須打一場『抗疫持久戰』,我們認為除了派發消費劵及其他紓困措施,政府亦應在短期內落實具導向性、針對性的紓困措施,以有限的資源創造最大的效益,優先扶助最有需要的人士。」

財政司司長公布二零二一年至二零二二年度預計錄得189億港元的盈餘,優於政府去年預期的1,016億港元赤字,並預期財政儲備會在本屆政府屆滿時,維持約9,467億港元。中期而言,政府預測財政儲備於五年期間逐步重回10,000元以上,即約為16個月開支,預料香港財政狀況逐步轉趨穩發展。

會計師公會稅務師會執行委員會主席陳嘉華資深會計師指:「由於目前疫情較預期嚴峻,紓困與振興經濟為當務之急。分期發放總額10,000元的電子消費券可以有效刺本地消費,政府參考去年發放消費券做法,簡化行政安排及減少相關開支,加上去年政府收入優於預期,此措施不會為庫房帶來長遠負擔。」

改革稅制長遠穩定經濟

香港整體公共財政狀況十分視乎新冠疫情能否迅速受控,若疫情持續惡化,經濟定必大受打擊。

 

公會關注香港中長期的財政狀況,多年來一直倡議擴闊稅基,以減輕因經濟周期轉變重大突發情況,以及人口老化等問題為庫房收入帶來的影響。公會理解政府革差餉制度之舉,因差餉是基礎較廣泛的稅項,差餉累進制可讓經濟能力較高的市民繳交較多差餉,達至「能者多付」的原則。

 

財政預算案建議委員會召集人楊澤志會計師表示:「差餉制度多年來未有重大改變,我們相信引入差餉累進制可增加庫房收入。差餉累進制度對樓價影響視乎實行細節,惟樓價最終取決於供求關係以及市場信心。」

雖然改革差餉制度有助政府增加財政收入,楊先生認為,政府應全面檢討公共財政收入模式,以解決稅基狹窄問題

國際稅制的發展方面,公會早前建議政府就經濟合作與發展組織(OECD) 發表「稅基侵蝕及利潤轉移」(BEPS) 2.0項目中的支柱二方案修例,以盡量減輕其對香港現行稅制的影響。政府公布將於下半年就 BEPS 2.0向立法會提交立法建議,向有關大型跨國企業集團徵收補足稅。公會認為此舉不但可為庫房增加稅收,更能保障本港的徵稅權,維持本港稅務及營商競爭力。

環保措施達致碳中和

公會支持政府在預算案提出的環保方案,在推動新源方面額外注資15元,將「EV屋苑充電易資助計劃」延長四年至二零二七/二八年度,令整個資助計劃可協助共約700個現有私人住宅樓宇內共約14萬個停車位。

此外,為了達到2050達致零碳排放的目標,我們認為政府可以考慮為綠色節能建築提供更多工商業建築免稅額。

公會就財政預算案有以下回應:

 

  • 綠色和可持續金融:政府計劃在下年度擴大政府綠色債券規模,公會認為有助紓緩政府財政壓力,亦能配合環球市場的環境,社會及管治趨勢,支持可持續發展。

 

  • 單一家族辦公室:我們歡迎政府就單一家族辦公室所管理的合資格家族投資管理實體提供稅務寬免,盡快諮詢業界。公會建議相關的合資格受惠家族辦公室每年業務開支至少需達200 萬港元並僱用不少於兩名僱員。

 

  • 支援初創企業及科技投資:在支援初創企業及科技投資,我們歡迎政府成立50億的「策略性創科基金」及成立「數字化經濟發展委員會」。我們亦建議具體落實相關措施時,可一併考慮為初創企業提供稅務減以及降低利得稅稅率,為期年。

 

  • 助中小企數碼轉型及經營: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。公會亦建議容許香港企業扣除部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)相關資本支出亦可作扣税。

 

  • 企業支援: 公會歡迎政府推出一系列的措施,協企業於短期內渡過疫情難關,例如再次延長「預先批核還息不還本計劃」六個月到今年十月底。我們亦希望政府考慮在二零二一至二零二二和二零二二至二零二三課稅年度引入臨時稅務虧損轉回機制,以紓緩經濟放緩的影響。

 

  • 人才培訓:公會樂見政府積極培訓人才,透過推出「綠色和可持續金融培訓先導計劃」和「金融科技從業員培訓資助先導計劃」等多項計劃,為青年提供實習和培訓機會,鼓勵及便利人才來港發展。

 

  • 內地發展支援計劃: 公會歡迎政府撥款1.35億港元推出「內地發展支援計劃」,認為此措施可協助在內地港人港商進一步開拓內地及大灣區機遇。
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