Budget | Hiring foreign domestic helpers can deduct at least 55,000 taxes? Cross-party support to ease pressure on middle class

Financial Secretary Chen Maobo announced the current government's first "Financial Budget" on Wednesday (22nd). Sources expect that the Budget will respond to the expectation of introducing foreign domestic helper tax deductions.

The cross-party Legislative Council also supports the introduction of tax deduction for foreign domestic helpers, and proposes that the tax deduction be at least 55,000 yuan.

Sources said that the budget is expected to touch on the tax deduction for foreign domestic helpers. After all, many families in Hong Kong actually need to hire foreign domestic helpers. In addition, the epidemic situation has caused the wages of foreign domestic helpers to "increase all boats." The tax deduction for foreign domestic helpers will help ease the pressure on middle-class families. .

Another source pointed out that if the introduction of tax deduction for foreign domestic helpers is implemented, the authorities may not "accept everything" suggested by political parties, and the maximum amount of tax deductible amount may be lower than the stipulated salary level for foreign domestic helpers.

As many families in Hong Kong may hire foreign helpers to take care of the elders or needy family members who do not live in different places, how to ensure that the employers who pay for the employment of foreign helpers will not lose benefits because they do not live in different places?

According to sources, as long as only registered employers of foreign domestic helpers can enjoy tax deductions, the problem can be solved.

Chen Maobo promised to include tax deduction for foreign domestic helpers in the scope of research

When Financial Secretary Chen Maobo attended a budget consultation forum at the end of January this year, he was also asked by the public whether he would introduce a tax deduction for foreign domestic helpers.

He stated at the time that he had heard many voices supporting the establishment of a tax exemption for the expenses of hiring foreign domestic helpers. He would include it in the scope of research for formulating the budget. Green light to create new deductions.

Several political parties or political groups in the Legislative Council also support the establishment of foreign domestic helper tax allowances, including the proposal by the Democratic Alliance for the Betterment of Hong Kong that each taxpayer can enjoy a tax deduction for foreign domestic helpers. The upper limit refers to the minimum wage of foreign domestic helpers, which is 56,760 yuan per year.

The New Democratic Party suggested an upper limit of 55,000 yuan, and the "A4 Alliance" proposed a tax deduction limit of 60,000 yuan.

According to government data last May, there were 328,000 foreign domestic helpers in Hong Kong as of March last year, down from 400,000 before the peak in 2019.

However, at that time, the government pointed out that due to the impact of the epidemic, some foreign domestic helpers were unable to come to Hong Kong to work as scheduled, and even caused a shortage of foreign domestic helpers in Hong Kong. As the epidemic situation in the Philippines and Indonesia has eased, and Hong Kong has moderately adjusted the entry prevention and control measures, Law Chi-kwong, then Secretary of the Labor and Welfare Bureau, described the problem of the shortage of foreign domestic helpers as dawning.

Yan Wenyu: Insufficient childcare services for the elderly need to hire foreign domestic helpers

Ngan Man-yu, member of the Legislative Council and chairman of the Family Affairs Committee of the Democratic Alliance for the Betterment of Hong Kong, pointed out that recent resources show that there are 340,000 foreign domestic helpers in Hong Kong. The party supports the introduction of tax deductions for foreign domestic helpers. Older homes and child care services are insufficient, so it is necessary to hire foreign helpers to help take care of the elderly and children, especially in dual-career families.

The Democratic Alliance for the Betterment of Hong Kong suggested that the full amount of the minimum wage for foreign domestic helpers should be used as the basis for calculating tax deductions. Yan Wenyu explained that the expenses of hiring foreign domestic helpers include not only monthly salary expenses, but also accommodation, meals, medical examinations, insurance, and round-trip air tickets. For expenses such as salary, the tax deduction is calculated based on salary expenses, which can indeed relieve the financial burden of Hong Kong families.

Local domestic helpers are welcome to be included in the tax deduction

As for whether local domestic helpers should be included in the scope of tax deductions, Yan Wenyu said that the party welcomes it very much. However, because local domestic helpers may not have signed a contract with their employers, paid labor insurance, etc., if they want to be included in the scope of tax deductions, it may involve more complicated administration. Therefore, it is first suggested that foreign domestic helpers can enjoy tax deduction.

▼On July 11, the Family Affairs Committee of the Democratic Alliance for the Betterment of Hong Kong released the results of a questionnaire survey on the current status of hiring foreign domestic helpers▼

A survey conducted by the Family Affairs Committee of the Democratic Alliance for the Betterment of Hong Kong last year showed that based on last year’s monthly salary of 4,630 yuan, only half of the 500 foreign domestic helpers interviewed could set the minimum wage to hire foreign domestic helpers, and some recruited at double the price.

Some interviewed employers even said that due to the impact of the epidemic, some foreign helpers voluntarily asked for a salary increase. In addition, there was a shortage of foreign helpers at the time, and employers had no choice but to raise wages in order to retain workers; Daily expenses are causing pressure. It is suggested that the authorities introduce tax deduction for hiring foreign domestic helpers.

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Rong Haien: It can be regarded as a measure to encourage childbearing and home care for the elderly

New Democratic Party Legislative Council member Rong Haien, who also supports the introduction of foreign domestic helper tax deduction, pointed out that based on the minimum monthly salary, the tax deduction limit is more than 50,000 yuan, but it will help relieve the economic pressure of many families.

She also pointed out that many families may employ more than one foreign domestic helper, and she hopes that the government will ease the tax deduction application for such families.

She also pointed out that the tax deduction for foreign helpers can also be regarded as a measure to encourage childbearing, because there are many dual-career families now, and hiring foreign helpers to take care of their children is a basic expense.

In addition, the government encourages home care for the elderly, and the help of foreign domestic helpers is indispensable. Otherwise, many families would find it difficult to let the elderly stay at home alone.

As for whether the employment of domestic helpers should be included in the scope of tax deduction, Rong Haien also hopes that the government can handle it leniently, suggesting that they should be regarded as caregivers, and related expenses can also be applied for tax deduction

▼On January 26, the New Democratic Party proposed a budget proposal including tax deductions for foreign domestic helpers▼

More than 90% of households with domestic helpers employ foreign helpers

The prescribed minimum wage for local domestic helpers was raised to 4,730 yuan per month starting from October last year, applicable to all employment contracts signed on or after October 1 last year, while the previous prescribed minimum wage was 4,630 yuan per month, applicable Contracts signed between September 28, 2019 and September 30, 2022.

According to the report on the employment of domestic helpers published by the Census and Statistics Department in 2021, the number of households employing domestic helpers increased from 212,500 in 2000 to 355,700 in 2019-2020, and the proportion of households in Hong Kong increased from 10.1% to 13.4%; Among the households employing domestic helpers, the percentage of employing foreign domestic helpers increased from 87.9% in 2000 to 92.2% in 2019-20.

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Is there a minimum wage for foreign domestic helpers?

From October 2022, it will be raised to $4,730 per month for all employment contracts signed on or after October 1, 2022

How many foreign domestic helpers are there in Hong Kong?

According to government data last May, there were 328,000 foreign domestic helpers in Hong Kong as of March last year, down from 400,000 at the peak in 2019