Personal Tax News
- Hong Kong to reduce salaries tax to 15%
Date: 11-Oct-2007 Sources: (People's Daily)
Hong Kong Special Administrative Region (HKSAR) Chief Executive Donald Tsang announced on Wednesday that the standard rate of salaries tax will be reduced to 15 percent in 2008-09.
Tsang made the announcement when delivering, at the Legislative Council, the first Policy Address since his reelection as HKSAR Chief Executive in March 2007.
'Given the significance of profits tax on the Government's revenue, I intend to adopt a prudent approach by initially offering a one percentage point cut to 16.5 percent in 2008-09,' he said.
These two measures will cost the Government about 5 billion HK dollars (645 million U.S. dollars) annually, he said. ' We will consider further profits tax relief if our economy remains robust and our public finances stay sound.'
He pointed to the fact that the Financial Secretary of HKSAR government had announced waiving rates for the first two quarters of the 2007-08 financial year.
'I am pleased to announce that rates for the last quarter will also be waived, subject to a ceiling of 5,000 HK dollars for each rateable tenement. This will cost the Government 2.6 billion HK dollars,' he said.
He said that the tax cut was part of his pledges made during his reelection campaign when he said, if reelected, he would provide tax relief, which includes gradually lowering salaries tax and profits tax rates to 15 percent, if fiscal conditions allow.
The consolidated surplus of the Government for 2006-07 is about3.5 billion HK dollars higher than the revised estimate in the 2007-08 Budget.
'To date, public revenue figures for 2007-08 are better than expected in some areas. I have therefore decided to introduce the relief measures,' he said. (One U.S. dollar equals 7.75 HK dollars)
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