For Immediate Release
The Hong Kong General Chamber of Commerce (HKGCC) has proposed a comprehensive range of measures to tackle the budget deficit and stimulate the economy in its recent submission to the Financial Secretary for the upcoming Budget Address.
The submission centers on three core areas: Supporting People and Businesses, Strengthening Hong Kong’s Competitive Edge, and Preparing for an Ageing Society.
To address imminent fiscal challenges, HKGCC Chairman Agnes Chan said the Chamber proposed introducing taxes on digital activities performed by non-Hong Kong resident digital service providers. “Drawing from other jurisdictions, we suggest a tax rate of 3% to 5% on a limited scope of digital activities, which would not only create a fairer tax environment for local digital suppliers but also enhance Hong Kong’s economic resilience. This would help consolidate Hong Kong’s position as a forward-looking global financial centre that can change economic headwinds into opportunities for growth and transformation,” she said.
The cost of the Government Public Transport Fare Concession Scheme for the Elderly has increased by around HK$1 billion over the past year, reaching HK$4.275 billion in the 2023-24 financial year. HKGCC proposes adjusting the concession scheme (HK$2 Scheme) by introducing an annual cap of 750 trips per elderly person aged 60 to 64. This would be equivalent to covering one round trip per day for 365 days a year. Individuals aged 65 and above remain unchanged.
HKGCC believes the Government can further reduce expenditure by reviewing the structure of civil service establishments and salaries to avoid duplication of services and align salaries with market rates.
With Hong Kong’s economy still facing significant challenges due to structural shifts, weak global demand, and geopolitical uncertainties, HKGCC recommends that the Government consider providing long-term fixed-rate mortgage loans to help mitigate the risks associated with interest rate fluctuations, aiding SMEs during these difficult times.
HKGCC Taxation Committee Chairman Wayne Lau said the submission also proposed long-term fixed-rate mortgage loans for businesses to purchase office or business premises for their own use, with a lower monthly payment under a longer mortgage period. The mortgage payment would be comparable to rent levels, which would provide stability for businesses to thrive amid economic restructuring in Hong Kong.
A strong emphasis was placed on enhancing Hong Kong’s competitive edge by retaining and attracting talent and businesses. HKGCC recommended leveraging public-private partnerships, further developing the bond market, internationalizing the RMB, and providing tax incentives to promote the development of the low-altitude economy.
Key Areas of Our Submission:
- Support for SMEs and the Public
- Increasing Revenue
- Containing Expenditure
- Financial Markets and Products
- RMB Internationalization
- Taxing Non-HK Resident Digital Service Suppliers
- Human Capital
- Headquarters Economy
- Greater Bay Area
- Innovation and Technology
- Real Estate
- Primary Healthcare
- Retirement Savings
A summary of the key proposals can be read here, while the full details of the Chamber’s submission can be downloaded here.
Media inquiries: Please contact Ally Wan at 2823 1266 / ally@chamber.org.hk