[Budget]Govt to introduce tax & short-term relief measures

    The Financial Secretary Chan Mo-po, Paul said in the 2017-18 Budget Speech that the Government will introduce a series of measures that will on the one hand share the fruits of economic development with members of the public, stimulate domestic demand, stabilise the economy and support the employment market and on the other hand, invest for the future by optimising the use of government resources.
  These measures include reducing salaries tax and tax under personal assessment for 2016-17 by 75%, subject to a ceiling of HK$20,000. The reduction will be reflected in the final tax payable for 2016-17. This proposal will benefit 1.84 million taxpayers and reduce government revenue by HK$16.4 billion; reducing profits tax for 2016-17 by 75%, subject to a ceiling of HK$20,000. The reduction will be reflected in the final tax payable for 2016-17. This proposal will benefit 132,000 taxpayers and reduce government revenue by HK$1.9 billion; waiving rates for four quarters of 2017-18, subject to a ceiling of HK$1,000 per quarter for each rateable property. This proposal will benefit 3.21 million properties and reduce government revenue by HK$10.9 billion; and providing an extra allowance to social security recipients, equal to one month of the standard rate Comprehensive Social Security Assistance payments, Old Age Allowance (OAA), Old Age Living Allowance or Disability Allowance. This will involve an additional expenditure of about HK$3.5 billion. Similar arrangements will apply to Low-income Working Family Allowance and Work Incentive Transport Subsidy, involving an additional expenditure of about HK$100 million.
  In addition to the above one-off measures, Chan proposes, after taking into account the Government's fiscal position in the short to medium term, the following five recurrent tax measures starting from 2017-18 so as to relieve the burden on taxpayers. The measures include widening the marginal bands for salaries tax from the current HK$40,000 to HK$45,000. This measure will reduce the tax burden of 1.3 million taxpayers and reduce tax revenue by HK$1.5 billion a year; raising the disabled dependant allowance from the current HK$66,000 to HK$75,000. This measure will benefit 35,000 taxpayers and reduce tax revenue by HK$50 million a year; raising the dependent brother/sister allowance from the current HK$33,000 to HK$37,500.  This measure will benefit 23,800 taxpayers and reduce tax revenue by HK$13 million a year; extending the entitlement period for the tax reduction for home loan interest from 15 years of assessment to 20 while maintaining the current deduction ceiling of HK$100,000 a year. This proposal will reduce tax revenue by HK$430 million a year; and raising the deduction ceiling for self-education expenses from the current HK$80,000 to HK$100,000.  This measure will benefit 3,500 taxpayers and reduce tax revenue by HK$8 million a year.
  Chan added this set of tax and short-term relief measures will cost HK$35.1 billion in total. Together with other spending initiatives in the Budget, they will have a fiscal stimulus effect of boosting GDP for 2017 by 1.1%.