Extensive Tax Cuts in Hong Kong
February 3, 2012 Taxation in Hong Kong
The government of Hong Kong has put forward a plan for the budget for the coming financial year containing several new tax measures aimed at reducing the tax burdens on taxpayers.
On February 1st the Financial Secretary of Hong Kong John Tsang outlined the budget plan for the 2012 – 2013 financial year, containing several tax changes which are expected to benefit more than 1.62 million taxpayers.
One of the primary changes outlined in the budget plan is a 75 percent reduction to profits taxes and salary taxes for the 2011 – 2012 financial year. If approved, the changes will cut the government’s revenues by approximately HKD 10.02 billion in the coming financial year.
In order to further reduce tax burdens , the basic allowance, married couple allowance, and dependant allowances have been increased. The deduction limit for elderly residential care expenses will be lifted. Homeowners in Hong Kong will also see a 5 year extension to tax deductions for home loan interest payments.
To increase the level of business activity, the new budget proposed waiving the business registration fee for a period of one year for all locally registered companies in Hong Kong.
Photo by Bill Chan