On 24 February 2021, against the backdrop of political uncertainties, competition from neighbouring countries and the economic recession aggravated by Covid-19, the Financial Secretary, Mr Chan Mo-Po (“Mr Chan”), delivered the 2021-22 budget speech at Legislative Council.
The Government has rolled out a total of around HK$300 billion in Covid-19 relief measures to help businesses and individuals hit hard by the Covid-19 and Mr. Chan forecasted a record high deficit of $257.6 billion for 2020-21. The fiscal reserves are expected to drift lower to $902.7 billion by the end of March 2021. Mr. Chan also anticipated the city would suffer an annual consolidated deficit in each of the fiscal years from 2021-22 to 2024-25.
Facing the challenges of fiscal deficits, the scale of proposed sweeteners has been adjusted this year. There will be a reduction of final profits tax, salaries tax and tax under personal assessment for 2020-21 by 100%, subject to a ceiling of $10,000, down from $20,000 last year. On the other hand, the Government proposed to issue electronic consumption vouchers in instalments with a total value of $5,000 to each eligible Hong Kong permanent resident and new arrival aged 18 or above with an aim of stimulating the economy and facilitating the speedy recovery of the consumption market.
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Feb 2021 - Hong Kong Budget 2021-22 tax newsletter_EN.pdf