As we enter 2018, the tax reform proposals in the U.S. will have a significant impact on the global economy and could lead to an influx of overseas liquidity back into the United States. As economic uncertainties prevail, we have to adjust our tax policies accordingly. I hope that the Hong Kong Government will offer tax concessions and tax cuts to enhance our competitiveness and attract talent.

The Government needs to include the group loss relief and loss carry-back arrangements that the business community has been advocating for a long time. The two-tier profits tax system should also be put in place as soon as possible to ease the tax burden on SMEs and attract corporate groups to set up their regional headquarters in Hong Kong.

To alleviate the operating pressure faced by SMEs, the Government should consider waiving business registration fees and licence fees to help them through this tough time.

For Hong Kong residents working in the Mainland, I hope that the Government will adopt a flexible mindset in reviewing Section 39E of the Inland Revenue Ordinance, and refer to the special tax provisions for cross-boundary workers in the European Union. Such provisions would allow Hong Kong residents who are working in the Mainland for no longer than 183 days to pay tax only in Hong Kong.

Tourism is an important pillar of our economy. I suggest the Government invest more resources to diversify tourism products which feature Hong Kong characteristics. For example, it could introduce cross-boundary cruises sailing between Guangdong, Hong Kong and Macao.

The Administration should also consider waiving the duty on spirits to benefit the catering industry and promote Hong Kong’s international status in wine trading.

The high cost of housing in Hong Kong also discourages professionals from staying to pursue their careers, and foreign talent from working or starting a business in Hong Kong. To reduce housing expenses, I propose that the Government should revise downward the rates on all classes of property by 1% to 4%. A rental allowance should also be considered to help the public alleviate the pressure of living.

Hong Kong has to innovate to keep pace with change around the world, so we can enjoy the benefits of a prosperous economy. I hope that the upcoming budget will demonstrate the Government’s determination to push forward reforms and include measures to address businesses’ needs, enhance the existing tax system, attract companies and talent to Hong Kong, as well as ease the burden on SMEs.