THE 2021-2022 BUDGET TARGETS ON REVIVING THE ECONOMY

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Over the past year, Hong Kong have experienced a very different life. The epidemic has aggravated the economic recession. Hong Kong’s Finance Secretary Paul Chan, has unveiled the 2021-2022 budget on 25th February at the Legislature. The budget focuses on stabilising the economy as well as relieving people’s burden. Moreover, Chan claimed the budget blueprint is focusing on relief measures. In summary, a total of 4 aspects:

First: Overcoming the Epidemic,

Secondly: Reviving the Economy,

Thirdly: Stimulating the Economy , and,

Lastly: Building a Liveable City. 

Overcoming the Epidemic

Support Local Enterprises

  1. Not only on extending the application period of 100% guarantee low-interest loan for enterprises to the end of 2021. But also, raising loan ceiling $6 million, also extend repayment period and duration of principal moratorium.
  2. Not only reducing profits tax for the year of assessment 2020/21 by 100%, subject to a ceiling of $10,000. As a result, the reduction will be reflected in the final tax payable for the year of assessment 2020/21.
  3. Providing rates concession for non-domestic properties for four quarters of 2021-22, subject to a ceiling of $5,000 per quarter in the first 2 quarters and a ceiling of $2,000 per quarter in the remaining 2 quarters for each rateable property.
  4. Similarly, waiving the business registration fees for 2021-22.
  5. Just as last year, waiving 75% of water and sewage charges payable by non-domestic households for eight months starting from April 2021, subject to a monthly ceiling of $20,000 and $12,500 respectively per household.
  6. To grant the 75% rental or fee concession currently applicable to eligible tenants of government properties and eligible short-term tenancies and waivers under the Lands Department for six months starting from April 2021.

Support Employment

  1. Launch of 4th tranche of Love Upgrading Special Scheme, eventually provide more training options and online course.
  2. Plan to expand the scope of Continuing Education Fund to include online courses.
  3. In the same way, to create around 30,000 time-limited jobs

Relieve People’s Hardship

  1. Set Up a Special 100% Loan Guarantee for Individuals. To provide an extra financing option of the unemployed. While loan ceiling at $80,000, interest rate fixed at 1% per yearly. Maximum repayment period of 5 years.
  2. Reduce salaries tax and tax under personal assessment 2020-2021 assessment year by 100%. Subject to 1 $10,000 ceiling.
  3. Provide rates concession for domestic properties. Subject to a ceiling of $1,500 per quarter in first 2 quarters and $1,000 per quarter in remaining 2 quarters.
  4. Correspondingly,  to grant a subsidy of $1,000 to each residential electricity account
  5. Provide extra 1/2-month allowance to elderly.
  6. Paying HKDSE examination fees.
  7. Earmark $1 billion to subsidise drainage repair works.

Reviving the Economy

  1. Electronic Consumption Vouchers – To issue $5,000 electronic consumption vouchers in instalments to each eligible Hong Kong permanent resident. Likewise, new arrival aged 18 or above to facilitate and stimulate local consumption
  2. Inject $1.5 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales, increase funding ceiling per enterprise to $6 million and extend the geographical coverage in phases.
  3. Allocate $375 million to Hong Kong Trade Development Council (HKTDC) to enhance its capability to organize online activities and to proceed with digitalisation
  4. Explore the use of HKTDC’s platforms to assist young business starters in promoting their original products.
  5. Develop the business version of the “iAM Smart” digital authentication platform.
  6. Provide electronic submission means for most government forms and licence applications by mid-2022.
  7. Provide e-payment options (including Faster Payment System) for making payments of most government bills and licences starting from mid-2022.
  8. Explore the development of the Hong Kong Legal Cloud.

Support Tourism

  1. Set aside $169 million to continue to take forward local cultural, heritage and creative tourism projects.
  2. Reserve $765 million to support Hong Kong Tourism Board (HKTB) in reviving the tourism industry.
  3. HKTB to conduct a comprehensive review of the positioning of Hong Kong’s tourism in the long run, formulate strategies to spur industry’s recovery.
  4. Consider reviving local group tours provided that public health can be safeguarded, allowing room for industry’s business operation.
  5. Discuss and work out Air Travel Bubble arrangement with suitable places.

Stimulating the Economy

Financial Services

  1. $24 billion of Silver Bond and no less than $15 billion of iBond this year. Lower the eligible age for Silver Bond subscription from 65 to 60.
  2. Issue green bonds totalling $175.5 billion within the next 5 years, and plan to issue retail green bonds Innovation and Technology.
  3. Roll out Green and Sustainable Finance Grant Scheme to subsidise expenses on bond issuance and external review services.
  4. Strive for the launch of Southbound Trading of Bond Connect within this year, and enhance the domestic Central Moneymarkets Unit.
  5. Provide subsidy for Real Estate Investment Trusts to list in Hong Kong.
  6. Launch a Pilot Insurance-linked Securities Grant Scheme to subsidise issuance costs.
  7. Provide subsidy for Open-ended Fund Companies to set up in or re-domicile to Hong Kong.
  8. Review tax arrangements relevant to family office business. 

Innovation and Technology

  1. Earmark over $200 million to roll out“Knowing More About IT” Programme, subsidise primary schools to enhance students’ interests and knowledge in I&T and their applications through extra-curricular activities.
  2. Regularise the pilot scheme which subsidises students studying science and technology in local universities to enrol in short-term I&T related internships.
  3. Inject $9.5 billion into the Innovation and Technology Fund by two yearly instalments.
  4. Hong Kong Monetary Authority to consider enhancing its Fintech Supervisory Sandbox to reduce time for launching innovative financial products in the market.
  5. Press ahead with the development of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop.
  6. Continue to implement the Science Park expansion and Cyberport 5 development.
  7. Continue to support the development of 5G networks and applications.
  8. Commence progressively the operation of the first batch of about 20 R&D laboratories under the “InnoHK Research Clusters” in the first quarter of this year.

Air Cargo Sector

  1. With the expansion of the existing express air cargo terminal, the commissioning of a new premium logistics centre and the Three Runway System, annual cargo handling capacity of Hong Kong International Airport (HKIA) is expected to increase to some 9 million tonnes in 2024.
  1. Explore measures to facilitate trans-shipment through Hong Kong, so as to maintain Hong Kong’s competitive edge as an international air cargo hub.
  2. Redevelop the Air Mail Centre at HKIA to become operational by end 2027 at the earliest Cultural and Creative Industries Construction Industry.

Cultural and Creative Industries

  1. Inject an additional $1 billion into the CreateSmart Initiative

Construction Industry

  1. Enhance the professional skills of mid-tier managers in the Government, also uplift their project delivery capability
  2. Nonetheless, promote cost management culture to the industry
  3. Continue to promote the Modular Integrated Construction (MiC) method and digitalisation of public works.

Building a Liveable City

Hong Kong will join hands with the financial sector and relevant stakeholders to take forward the strategic plan announced end last year by the Green and Sustainable Finance Cross-Agency Steering Group, thereby leveraging our role as an international financial centre to mobilise capital towards sustainable projects in the region and enhance Hong Kong’s position as a green and sustainable finance hub in the region. 

Green City

  1. Investing $1 billion to install small-scale renewable energy systems at government buildings and infrastructure.
  2. Following with $150 million to conduct energy audits and install energy-saving appliances, free of charge, for social welfare NGOs.
  1. Additionally, inject $1 billion into Recycling Fund and extend the application period to 2027.

Relieve Traffic Congestion

  1. Not only, increase the rate of each tax band for the first registration tax for all private cars (including electric-private cars) by 15%, but also, the vehicle licence fee by 30%.

Quality Living

  1. Designate $500 million to enhance facilities in country parks
  2. In addition, allocate $55 million to enhance hiking trails in country parks
  3. Also, set apart around $300 million to implement a five-year plan for upgrading football pitches.

Strengthen Healthcare System

  1. Allocate $147 million to enhance mental health services.

Caring and Inclusion

  1. Furthermore, injection of $1.1 billion into Lotteries Fund to ensure that feasibility studies for much-needed social welfare development projects can proceed as scheduled.

For further information, please contact us. 

You may want to read: THE 2020-2021 BUDGET HELP BUSINESSES IN HONG KONG

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