Hong Kong Budget 2021: What You Need to Know
6 minute read
Hong Kong is on its tracks to recover from the effects of the COVID-19 pandemic. This was one of the key messages communicated by Finance Secretary Paul Chan in his latest address on the Hong Kong budget for the fiscal year 2021/2022.
With the city’s economy projected to grow between 3.5 to 5.5 per cent in 2021 and an average of 3.3 per cent each year from 2022 to 2025, businesses must not only prepare to safeguard their businesses but gear up to operate in a post-COVID world.
In his address, Chan announced counter-cyclical measures costing more than HK$120 billion to boost the Hong Kong economy – but what does that mean for your business? Keep on reading to know the key highlights!
1. HK$9.5 billion package for enterprises
- Businesses will benefit from a package of measures worth HK$9.5 billion in total.
- Measures include reducing profits tax for the year of assessment in 2020-21 by 100 per cent, subject to a ceiling of HK$10,000.
2. Extension for government-backed loans
- Extend the application period of 100% guarantee low-interest loan for small- and medium-sized businesses to the end of 2021.
- Extension of application period to the end of 2021.
Borrowing limit to be raised from HK$5 million to HK$6 million, and the maximum repayment period increased from five to eight years.
- Tenants in government properties to receive a 75 per cent rent reduction for six months starting April 2021.
3. Business fees and domestic bills cut
- Waiver of business registration fees for 2021-2022 for businesses badly affected by the pandemic.
- Waiver of 75 per cent for water and sewage charges payable by non-domestic households for eight months starting April 2021, subject to a monthly ceiling of HK$20,000 and $12,500 respectively per household.
4. Help for firms selling abroad
- Scheme of HK$1.5 billion dedicated to supporting businesses with branding, upgrading and domestic sales.
- New scheme will help companies develop their markets in 37 economies, up from 20.
- Coverage in scheme to include investment promotions and protection agreements.
- Funding ceiling for each enterprise will increase from HK$4 million to HK$6 million.
5. Funding for businesses
- Innovation and Technology Support Programme (ITSP) provides a maximum funding support of up to HK$2.8 million undertaken by R&D Centres to support platform R&D projects and seed projects. Applications end 21 May 2021.
6. Enhancements of green bonds
- Emphasis to develop Hong Kong into green finance trade hub.
- Expand the issuing of green bonds from HK$100 billion to HK $200 billion.
7. Travel bubble plans
- Arrangements for air travel bubbles with countries of close economic relations and stabilizing epidemic conditions.
For employers and employees
1. Reduction in salaries tax
- Five-pronged strategy starting with a reduction in salaries tax and tax under personal assessment for the year 2020/21 by 100 per cent, subject to a ceiling of HK$10,000.
2. Emphasis on employment
- HK$6.6 billion dedicated to creating 30,000 jobs.
- Launch the fourth tranche of Love Upgrading Special Scheme to provide more training options and online courses.
- Plans to expand the scope of Continuing Education Fund to include online courses.
Hong Kong’s economy is geared up to recover from the turbulent year brought about by 2020. With these measures, it provides an optimistic outlook to the city’s economy and hardships faced by many businesses during this difficult period.
More details will be added to the article as they are released over the coming days.
Meanwhile, for any enquiries on how to help manage your business operations, reach out to us for more information. Our team of experienced and dedicated staff will be happy to help!
For further information on the Hong Kong Budget 2021, visit the official website here.