For Immediate Release
The Hong Kong General Chamber of Commerce (HKGCC) has urged HKSAR Financial Secretary Paul Chan Mo-Po to make Hong Kong’s competitiveness the top priority in his forthcoming Budget on 28 February.
In its submission to the Government on 31 January, the Chamber stressed the importance of reinforcing our low and simple tax regime, and the need to remove unnecessary regulations.
Reducing tax
In a changing global environment, the Government must take action to ensure Hong Kong retains its edge over its many rivals in the region and beyond.
“Hong Kong is rightly recognized as one of the most competitive economies in the world, but if we are not vigilant, our advantage could easily slip,” said Chamber Chairman Stephen Ng.
A simple and low tax system has long been regarded as one of Hong Kong’s chief attractions as a place to do business. But as other nations introduce major tax cuts of their own, our advantage runs the risk of being narrowed.
But we are able to act quickly in this regard. Hong Kong, unlike most of our competitors, has the advantage of a large and growing surplus that should be put to good use.
“Our huge budget surplus suggests that the Government has been collecting more money than it needs,” said Chamber CEO Shirley Yuen. “It is time to put that some of that wealth back in the hands of businesses and consumers for the good of all Hong Kong people.”
HKGCC has therefore proposed that the Government introduce a temporary tax cut. Reducing profits and salaries tax for a defined period of three years will return money directly to businesses and the middle class, and therefore help drive Hong Kong’s continued growth and prosperity.
Reviewing regulation
The Chamber also continues to argue for light touch regulation so that our local businesses, especially SMEs, are not burdened by the need to comply with a host of out-of-date rules and inefficient procedures.
To this end, we have suggested that the Government should set up a working party to review all existing and upcoming legislation. Currently, sectors ranging from construction to logistics are constrained by unnecessary administrative burdens and sometimes confusing and contradictory regulatory requirements.
“Excess regulation benefits no one and prevents our local businesses from growing and innovating,” Ng said. “The private sector can help the Government in this process, and the Chamber is ready and willing to contribute to a review that will ultimately benefit the city’s economy.”
Other proposals in the Chamber’s submission include:
- Improve the transshipment process at HKIA;
- Allow the carry back of tax losses and group loss relief;
- Incentivize the establishment of regional headquarters; and
- Review the tax assessment period.
The full submission can be read on the Chamber’s website.
Media inquiries: Please contact Mr Ray Lai at 2823 1297/ [email protected]