PwC also calls for tax concessions for high-tech companies and small and medium enterprises
NG KANG-CHUNG
KC.NG@SCMP.COM
PUBLISHED : Wednesday, 06 January, 2016, 6:39pm
UPDATED : Wednesday, 06 January, 2016, 6:39pm
Financial Secretary John Tsang may announce a budget surplus of almost HK$100 billion. Photo: Jonathan Wong.
A leading accounting firm has urged the government to offer tax concessions to boost the high-tech sector and help struggling small and medium firms as it forecast a surplus of HK$95.5 billion in the current financial year, thanks largely to a boost in revenue from stamp duty.
The surplus – which would be the highest since the 2007-08 fiscal year – would be more than double the HK$36.8 billion previously forecast by the government, even after deducting HK$45 billion for the government’s housing reserve fund.
READ MORE: Deconstructing the 2014-15 Hong Kong Budget
The housing reserve was set up in 2014 to support the government’s housing target. It now contains HK$29 billion. The government has promised to top it up with another HK$45 billion.
The accounting firm, PwC, said the huge surplus was primarily attributable to unexpectedly high stamp duty revenue, which the firm estimates will reach HK$77.4 billion compared to a government estimate of HK$50 billion.
The firm expects profits and salaries tax to bring in HK$200.8 billion and revenue from land sales to hit HK$71.5 billion.
PwC also estimated the fiscal reserves would reach HK$850.7 billion by the end of March, equivalent to 24 months of government spending.
Financial Secretary John Tsang Chun-wah is set to unveil his latest forecasts for the current fiscal year in his budget speech to be delivered on February 24.
So Kwok-kay, a tax partner at PwC Hong Kong, said: “With buoyant trading in the equity market, coupled with the rise in property transactions, we expect total stamp duty revenue to reach HK$77.4 billion.”
The latest Land Registry figures released yesterday showed there were 76,159 property transactions worth HK$548.65 billion last year – up 0.2 per cent in value on the previous year and up 20.2 per cent on 2013.
So declined to comment on whether it would be the right time to roll out a universal retirement protection scheme in view of the huge surplus, saying: “The issue needs more consultation and should be looked at from a longer-term perspective.”
Fellow tax partner Agnes Wong Hiu-yin called on the government to introduce tax concessions to help boost Hong Kong’s competitiveness, proposing to cut profits tax from 16.5 per cent to 10 per cent for eligible high-tech companies and a similar concession for small and medium-sized enterprises with annual turnover below HK$5 million.
PwC also called on the government to capitalise on the economic boost brought about by Beijing’s “One Belt, One Road” strategy, and develop Hong Kong as a platform for mainland companies “going global”.
The “One Belt, One Road” plan refers to the New Silk Road Economic Belt linking China with Europe and the Maritime Silk Road connecting China to Southeast Asia, Africa and Europe.
http://m.scmp.com/news/hong-kong/economy/article/1898415/hong-kong-set-unveil-hk95b-budget-surplus-strong-stamp-duty
