The Covid-19 situation continues to evolve rapidly and Hong Kong’s first outbreak of local infections since the summer is a disappointing setback. Omicron continues to complicate the path out of Covid and prolong uncertainty for businesses. So we are keen to see what policies the Financial Secretary will unveil in his upcoming Budget Address. 

After consulting our members, we submitted proposals to the Government how we believe they can best help businesses amid the current upheaval, as well as suggestions to preserve the city’s competitiveness in the longer term.  

While Hong Kong’s economy bounced back in 2021, recovery has been uneven, with the retail and tourism sectors continuing to be the hardest hit. So we would welcome targeted measures for these key industries.

The electronic consumption vouchers released last summer were a great success, spreading some feel-good sentiment among consumers while boosting our local economy. If Covid-related restrictions continue, another round of these e-vouchers would be very helpful. A related suggestion proposes vouchers specifically for tourist sites: this approach has been used successfully in Singapore to encourage citizens to visit local attractions.

We would also like to see more assistance for the city’s smaller businesses to make the most of new digital opportunities. This will improve their operational efficiency while also making their services more attractive to customers. 

For SMEs, the various support programmes the Government has unveiled in the past two years have been invaluable and we suggest that these schemes be tapered gradually, rather than abruptly stopped as the economy gets back to normal. 

Taking a longer view, the global tax landscape is shifting. The OECD’s BEPS tax framework will introduce a global minimum tax rate of around 15% in the next few years, as well as measures on taxing the digital economy. Although these changes will mainly impact large multinationals, they will also indirectly affect the whole city, especially when Hong Kong’s low and simple corporate tax regime has long been one of the key advantages of our business-friendly environment. 

To remain competitive, we suggest setting up a dedicated office to engage with global stakeholders to promote Hong Kong’s many advantages as an international finance and trade hub. Salary tax is an area where we can keep our competitive edge, particularly in attracting high-level talent from around the world, as it is not affected by BEPS. 

This Chinese New Year is arriving amid considerable uncertainty, and our festivities will be low-key once again this year. But we hope that the new lunar calendar will bring some much-needed cheer and hopefully brighter prospects as the Year of the Tiger progresses.

Peter Wong
[email protected]