Hong Kong financial chief dashes hopes for wide-ranging tax cuts for corporations
Paul Chan Mo-po says the city must protect against unforeseen market changes at a tax forum that also featured a warning about the city’s international tax compliance
There are no plans to cut Hong Kong’s corporate taxes across the board because the government needs to reserve funds to protect the city against economic fluctuation, the city’s financial chief said on Monday.
Financial Secretary Paul Chan Mo-po dashed the hopes of the business community for cuts at the government’s first summit on taxation, which brought together 400 business people, accountants and civil servants who also heard a stark warning about tax compliance from an world economic body.
Chan said that when the government considered a tax break, such a concession should be able to serve a policy objective, for example, promoting one industry.
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“So long as the concession could bring benefits to the economy and the society, the government won’t mind having to forgo some tax revenue,” Chan said.
An increasingly louder segment of the business community had been calling for more tax breaks after Hong Kong’s leader, Chief Executive Carrie Lam Cheng Yuet-ngor, unveiled a tax policy in her first policy address this month that lowers profit tax rate for first HK$2 million (US$256,000) in profit to 8.25 per cent from the existing 16.5 per cent. The new policy aims to ease financial burden on small and medium companies.
In her opening remarks at the forum, Lam said she hoped the bill would be voted on by the Legislative Council this year.
