For Immediate Release
The Hong Kong General Chamber of Commerce (HKGCC) presented the Government with a comprehensive range of proposals on 16 January, aimed at strengthening Hong Kong’s competitiveness while addressing structural and geopolitical challenges. The submission to the Financial Secretary for his upcoming Budget also lays out recommendations for leveraging Hong Kong’s silver economy and maximizing opportunities for business and society driven by the emergence of AI.
Many of the challenges facing Hong Kong going forward are two sides of the same coin, so a more targeted and holistic approach is needed to maximize the outcome. For the short term, the Chamber urges the Government to revitalize the economy and support businesses. For the medium term, we should accelerate our smart city transformation by leveraging AI and innovation. Looking at the long term, Hong Kong needs to build economic resilience to address the challenges posed by geopolitics and economic transformation.
AI Transformation
As AI has the potential to drive Hong Kong’s productivity and economic transformation, HKGCC urges the Government to expand the Innovation and Technology Development Blueprint, which was promulgated in 2022, to include a dedicated AI strategy and roadmap.
Upskilling our workforce is vital to help people benefit from the growth of AI tools and increase companies’ competitiveness.
HKGCC proposes that the Government offer tax incentives to employers, such as a 120% tax deduction for AI-related training expenses of staff, and up to $5,000 in subsidies under the Continuing Education Fund to offset fees for AI training courses. HKGCC also calls for funding to support companies’ responsible adoption of AI, backed by streamlined application procedures and early disbursement to encourage businesses to acquire software, hardware, high-performance AI tools and cloud computing resources.
Northern Metropolis Priorities
To accelerate development of the Northern Metropolis, HKGCC recommends wider adoption of public‑private partnerships, involving both financial and non‑financial participation from the private sector, and streamlining approval procedures to shorten timelines and reduce construction costs. Enhanced tax depreciation allowances for capital expenditure in the Northern Metropolis, along with investment incentives such as 1.5x–2x multipliers for eligible investments, would attract more private capital to fund government‑led projects.
HKGCC lauds the Government’s prudent fiscal principles, given global uncertainties, but suggests a dual approach may reap greater rewards. For example, offering profits and salaries tax reductions, and supporting SMEs with long‑term fixed‑rate mortgage loans, would stimulate the economy and consumption.
Additional revenue could be raised by imposing a digital services tax on non‑Hong Kong resident digital service providers. A tax rate of 3% to 5% on a limited scope of digital activities would help create a fairer environment for local digital suppliers, while boosting Hong Kong’s revenues.
The Chamber also urges the Government to bolster efforts to leverage the city’s position as a leading international financial centre. Advancing family offices, growing the bond market, sustainable finance and intellectual property trading sectors, as well as new growth areas such as digital assets and commodity trading, can reinforce the city’s status as a preferred hub for global headquarters and investment.
Silver Economy
With around 33.5% of Hong Kong’s population forecast to be 65 years of age or older by 2046, HKGCC recommends that the Government formulate a holistic population growth strategy to encourage people to have children, expand the labour supply, improve healthcare services, reform the MPF system and enhance land-use planning.
For example, we recommend splitting the current 5% mandatory MPF contributions into 4% for MPF and 1% for a health insurance savings fund to help citizens start saving for future medical needs. The Chamber also recommends promoting telemedicine and electronic prescriptions to increase efficiency and services.
To meet the demand for more elderly-friendly accommodation, formulating a policy to incentivize the development of senior housing could include bonus plot ratios and land premium vouchers.
Key Areas of Our Submission:
- Well-managed Public Finance
- Attract Enterprises and Investment
- Strengthen the Competitiveness of the Finance Market
- Create Synergy in the GBA
- Foster Development of Northern Metropolis
- Catch the AI Boom
- Get Ahead of Ageing
Full details of the submission can be downloaded here.
Media Inquiries: Please contact Ms Ally Wan at 2823-1266 / [email protected]