Accountants Association: The Hong Kong government's deficit is expected to exceed 100 billion, and it is recommended to introduce children's education subsidies to attract overseas talents

The Hong Kong Institute of Certified Public Accountants predicts that the economic weakness caused by the fifth wave of the epidemic and the general downturn in the real estate market will reduce land sales in 2022/23, including the recent loss of a large land bid in Stanley, resulting in a deficit of 113.9 billion yuan for the year, compared with the government's The original forecast of 56.3 billion yuan was more than twice as high, and fiscal reserves will fall to 843.2 billion yuan by the end of March 2023.

Regarding the problem of brain drain in Hong Kong, the association stated that in order to encourage overseas talents to bring their families to Hong Kong for long-term development, it is recommended to provide private education subsidies for their children, and encourage employers to allow employees to work at home within one or two years after the birth of their children, or provide subsidies Employees hire domestic helpers or spend on child care.

At the same time, the government can provide subsidies or tax incentives for relevant labor shortage industries, so that employers can provide more competitive salaries to attract talents.

The chairman of the association, Fang Yunxuan, said that due to the uncertain global economic outlook, Hong Kong is expected to face various challenges this year, and the external conflicts between Russia and Ukraine will continue, and many economies will be affected by high inflation and rising interest rates.

However, as the mainland economy returns to normal, it is expected to have a positive effect on the Hong Kong economy.

There is no suggestion to distribute consumer coupons to places that will bring long-term benefits

Regarding the fact that the association did not suggest that the government distribute consumer vouchers this year, she said that consumer vouchers are a one-time measure to boost the economy, and she suggested that they can be used in other places that can bring long-term benefits this year.

She pointed out that the government has recently relaxed quarantine measures, and the mainland has also implemented customs clearance, but there is still a quota system. In addition, the rebound of the epidemic situation in the mainland has not seen a significant rebound in the flow of people visiting Hong Kong, but it is expected to still have a positive impact on Hong Kong. The anti-epidemic policy has reconnected Hong Kong with the mainland and the international community.

Yang Zezhi, convener of the SBA Budget Proposal Committee, said that the SBA will continue to advise the government to conduct a more comprehensive review of Hong Kong's tax system, including research and consultation on new taxes. When the economy improves, citizens and businesses will be more likely to accept it.

At the same time, with regard to international tax changes, including the global minimum 15% corporate tax imposed on multinational companies in the European Union, how Hong Kong can maintain its competitiveness under the changing situation also needs to be discussed.

Hong Kong fell in the ranking of the global financial center last year. The association suggested that the government establish a more favorable business environment to attract foreign investment, such as providing a 50% profit tax discount for regional headquarters companies that meet certain conditions, and introducing a simple collective loss tax relief system to encourage More companies set up their regional headquarters in Hong Kong.

A flexible fund can be established to support business promotion and development in the Greater Bay Area.

Advocate to increase the voluntary medical insurance tax exemption and increase the upper limit of TVC

Regarding small and medium-sized enterprises in Hong Kong, the association recommends that the government provide more support for digital transformation, including a 36-month subsidy to hire relevant professionals, upgrade systems and equipment, prepare for the electronic filing of profits tax, and establish new funds or expand existing training Fund etc.

In order to reduce the burden on the public health system, it is proposed to increase the maximum tax-free amount of eligible premiums paid by the Voluntary Health Insurance Scheme from 8,000 yuan to 12,000 yuan, and to expand the scope of the scheme to other types of services such as outpatient services.

At the same time, to review personal tax exemptions and encourage retirement savings, the tax-deductible upper limit of MPF voluntary contributions (TVC) has been raised from 60,000 yuan per year to 100,000 yuan.