NEARLY two million mostly middle-class taxpayers will enjoy some relief as Financial Secretary (財政司司長) John Tsang Chun-wah (曾俊華) tries to stimulate local consumption.
In his budget speech, Tsang surprised those who pay tax or own a flat or a small or medium-sized company with new increases in tax allowances – but he upset the grassroots whose previous benefits have either been cut or scrapped completely.
Despite speculation of possible cuts to sweeteners, it turned out Tsang will dish out HK$38.8 billion of relief measures – up 14 percent on the HK$34 billion he gave away last year.
About 1.93 million taxpayers will enjoy increased allowances. Individuals and single parents who earn an annual income of less than HK$132,000 and married couples who together earn less than HK$264,000 a year will not pay tax. Tsang also increased allowances to HK$23,000 for maintaining a dependent parent or grandparent aged between 55 and 59 and increased it to HK$46,000 for an elderly person aged 60 or above.
He continued a 75 percent salary tax or profits tax rebate that will be capped at HK$20,000, similar to last year – which will benefit 1.96 million taxpayers.
Of them, only 185,000 will be able to receive a full rebate while more than 460,000 will only get a HK$730 rebate.
In addition, 3.17 million properties will have rates waived for the entire year at a ceiling of HK$1,000 per quarter, less than the total waiver of HK$2,500 for each of the two quarters last year. It is understood that this measure will benefit small property owners.
Accounting firm Ernest and Young (安永會計師事務所 ) said a middle income couple earning HK$80,000 a month with two children could save HK$8,160 annually or about 45 percent of tax payable in the fiscal year 2015-16.
(This article is published on The Student Standard on 29 February 2016)
Pass and fail, praised and panned
Delivery of the 2016-17 Budget Speech by the Financial Secretary