At long last, Hong Kong has shaken off three years of Covid-related restrictions, returning to quarantine-free travel and reopening its borders with the Mainland. As the city begins to climb back to pre-pandemic levels of normalcy, we keenly await the policies that the Financial Secretary will reveal in his upcoming Budget Address.

Last month, the Chamber unveiled its 2023 economic forecast, according to which real GDP would grow by 3.8% with a headline inflation of 3%, thus shoring up confidence in Hong Kong’s competitiveness as a place to work, live, and do business. After consulting with our members, we submitted proposals for the 2023-24 Budget to the HKSAR Government on how best to help boost the economy. The Chamber’s submission addresses pressing issues such as retaining and acquiring talent, fostering a more business-friendly environment, and making the tax system more effective. 

In order to raise public confidence and help the economy, it would be beneficial to launch another round of electronic consumption vouchers, especially after the success of the e-vouchers in the previous two years. Other short-term relief measures we propose are offering tax and rent rebates to homeowners instead of landlords, introducing subsidies to defray higher energy costs, and extending the Principal Payment Holiday Scheme and the SME Financing Guarantee Scheme. 

While global crises such as the Ukraine war and rising inflation are predicted to continue having a knock-on effect on world markets, I believe it is important to focus on Hong Kong’s innate strengths. The city has long been known for its corporate tax regime; however, as it lacks a dedicated government agency for tax policy, investments should be made in the Budget and Tax Policy Unit (BTPU), to map out a strategy for enhancing Hong Kong’s tax competitiveness. 

In the long term, the issue of brain drain and the global battle for talent remains a priority. While the Government’s Top Talent Scheme (TTS) will go a long way to bring highly skilled professionals to our shores, hiking dependent allowances and surveys on identifying market gaps for sought-after skills are some measures that we suggest. 

Also paramount to the process of steady recovery is the revitalization of the freight and logistics sector. To that end, it is crucial that efforts are put into expanding Hong Kong’s tax treaty network, which would offer a range of benefits to international shipping firms and aircraft lessors that want to establish a presence in Hong Kong. 

Greening Hong Kong’s public transport sector is also important to our ambitions to create a livable city. To achieve such an outcome, we have put forward recommendations to facilitate the transition to electric vehicles. You can read more details about these and additional proposals elsewhere in this issue of The Bulletin.

As we work together to maintain Hong Kong’s competitive edge and emerge stronger from the pandemic, I hope the Year of the Rabbit will prove to be one of unimpeded economic growth, so that the city can reclaim its mantle as the best place to do business.

George Leung
[email protected]