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For immediate release
The Hong Kong General Chamber of Commerce welcomes Financial Secretary John Tsang Chun-wah’s cautiously optimistic approach to this year's Budget.
The Chamber has been calling for proactive measures to leverage the competitive advantages of Hong Kong’s financial services industry and complement the developments in the Mainland. The Chamber regards the measures announced in the Budget today will help Hong Kong along the road towards achieving these goals.
“The proposed measures to deepen and broaden Hong Kong's roles as an offshore RMB centre, a base to internationalize the RMB and the premier asset management centre of the region are in line with the views advocated in the Chamber’s submission to the Financial Secretary,” said Mr Andrew Brandler, Chairman of the Chamber. “Working closely with the Mainland to develop into an offshore RMB centre is a key component of Hong Kong’s strategy, and we hope this can move forward smoothly."
Mr Brandler also welcomes the Government’s adoption of some of its other suggestions to strengthen the competitiveness of the financial industry and the general business environment, including tax concessions on local bond interest income, the extension of tax deduction to cover registered trademarks, copyrights and registered designs, and waiving of the business registration fee. The initiatives to enhance the learning of English and Putonghua in schools and in the workplace also address the business community’s concerns about the language proficiency of our workforce.
Meanwhile, the Chamber is disappointed that the Government has lost a golden opportunity to renew Hong Kong’s competitive advantage by returning the Profits Tax rate to 15%.
Mr. Alex Fong, CEO of the Chamber, said, “When our potential competitors are reducing tax rates to lure businesses, it makes strategic sense to raise our profile as the most competitive tax environment in the region. At a time when other financial centres are placing onerous restrictions on business, we need to act boldly, to seize the initiative and place ourselves in an unchallengeable position for the 21st century.”
Mr Fong also urged the Government to continue monitoring the economic situation and launch exceptional measures as necessary to support businesses, especially the SMEs, to keep them viable during the prolonged recovery.
The Chamber is concerned that public expenditure has risen to 19.8% of GDP. Although the public expenditure is still under 20% of GDP, the long-term trend should be closer to the 17% range once the need for stabilization and exceptional measures is over.
“Government reserves, now standing at more than $500 billion, have actually grown strongly during the past year when the economic situation was difficult,” said David O’Rear, Chief Economist of the Chamber. “As the government’s fiscal reserves are distinct from other funds, such as the Exchange Fund used for stabilizing the exchange rate, there is room for returning a reasonable portion to taxpayers.”
For media enquiries, please contact:
Ms Lavender Cheung, Chief Corporate Development Officer, at 2823-1233, or
Ms Tina Ng, Public Relations and Press Officer, at 2823-1227.
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