search icon cross white
spacer bookmark cross
search icon
Search Tags

  Total: Bookmarks

 Bookmark(s) Click icon to add bookmark(s) to my profile

  •  Local Bookmark is Empty

 User Profile Bookmark(s)

  •  Profile is Empty
bookmark cross white
search icon cross white
search icon
Search Tags

Forgot password / username Re-send activiation email Register an account Help with web login

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.










疫情嚴峻 公會歡迎政府集中抗疫及紓解民困的方向













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。






  • 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。