Calls For Budget Relief For Tenants, New Homeowners

The financial secretary has been urged to lower the salaries tax rate and offer relief to both homebuyers and tenants in his upcoming budget proposal as part of a series of sweeteners amid the Covid-19 pandemic.

The Taxation Institute proposed on Monday that people's rental expenses should be tax deductible for up to HK$100,000 in relief to tenants.

The group also proposed relief for first-time homebuyers, with stamp duty waived for flats worth less than HK$8 million and not resold within three years.

It suggested that the marginal salaries tax rate should go down by 2 percentage points to 15 percent, similar to the reduction in profits tax in recent years.

The institute also called for a tax deduction for businesses that hire youngsters aged between 18 and 25 to stimulate youth employment.

The institute's council member, Edwin Bin, said even though Hong Kong is expecting a deficit of more than HK$300 billion for the current financial year, there's still room for the government to offer relief to people feeling the pinch under Covid-19.

"People have already suffered quite a lot during the past year... Hong Kong still has a substantial reserve, we have saved up for quite a long time already and it's probably time to help people more right now," he told a press conference.

The institute's president, Webster Ng, said it's not against the idea of another round of cash handout after each Hong Kong permanent resident received HK$10,000 last year, but that a targetted approach is also needed to help those in need.

Ng said he doesn't see a need for the government to issue bonds because of the deficit.

But he also said Hong Kong has to start addressing its narrow tax base as an ageing population puts pressure on public coffers.