Budget Sweeteners Trimmed On Tax, Extra Benefits

Financial Secretary Paul Chan announced a series of financial relief measures for the public in his budget speech on Wednesday, but the pot of sweeteners has been considerably reduced compared to last year's.

Chan said he was "very concerned" about the tax burden on salary earners and is planning a 75-percent reduction in salaries tax for the 2018-19 financial year, subject to a ceiling of HK$20,000.

But the cap is significantly lower than the HK$30,000 maximum last year.

Chan said the move is expected to benefit more than 1.9 million taxpayers and cost the government HK$17 billion.

Profits tax will also be slashed by 75 percent, subject to a ceiling of HK$20,000, again down from HK$30,000 last year.

For property owners, Chan said the government will again waive rates for four quarters, capped at HK$1,500 per quarter for each property. Last year the cap was HK$2,500.

The plan will cost HK$15 billion and will benefit the owners of almost 3.3 million properties, he said.

The financial chief also pledged to spend around HK$3.84 billion on extra allowances for social security recipients.

The payments will be equivalent to one month of the standard rate of Comprehensive Social Security Assistance, Old Age Allowance, Old Age Living Allowance or Disability Allowance.

A similar arrangement will also apply to recipients of the Working Family Allowance and Work Incentive Transport Subsidy.

Last year, people who receive these benefits got an extra two months' worth of payments, rather than the one month that Chan is providing this time.

The giveaways also include an additional HK$1,000 in vouchers for people who are eligible for the Elderly Health Care Voucher Scheme, and one-off grants for poor students of HK$2,500.

The government is also going to shoulder exam fees for all full-time students sitting the 2020 HKDSE Examination, a measure which had already been put in place for this year's exam.