Welcome to Our Hong Kong 2020-21 Budget Summary
The 2020-21 Budget was announced by Financial Secretary of Hong Kong, Mr. Paul Chan on Wednesday, 26 February 2020. To cope with the tough economic environment, this budget adopts an expansionary fiscal stance with optimal use of Hong Kong fiscal reserves to implement counter-cyclical measures summarised below:
Stimulate the Economy and Smoothen Livelihoods
Cash payment of HKD10,000 to every Hong Kong Permanent resident aged over 18.
Reduction of salaries tax and tax under personal assessment for the year of assessment 2019/20 by 100%, subject to ceiling of HKD20,000.
Waiver of domestic properties rates for four quarters, subject to ceiling of HKD1,500 per quarter.
Extra 1-month allowance of Old Age Allowance, Old Age Living Allowance or Disability Allowance.
1-month rental payment for lower income tenants living in public rental units.
Provide HKD2.5 billion for Employees Retraining purposes.
Support Enterprises and Safeguard Jobs
Waiver of business registration fee for 1 year and waiver of registration fees for company annual returns for 2 years.
Reduction of profits tax for the year of assessment 2019/20 by 100%, subject to a HKD20,000 ceiling.
Introduction of low-interest loan with 100% Government guarantee for enterprises. Maximum loan of HKD2 million with repayment period up to 3 years.
Waiver of non-domestic properties rates for four quarters, subject to a ceiling of HKD5,000 per quarter in first two quarters and HKD1,500 per quarter for remaining two quarters.
75% subsidy of non-residential Electricity charges for 4 months, subject to a monthly cap of HKD5,000.
75% waiver of non-domestic households’ water and sewage charges for 4 months, subject to monthly cap of HKD20,000 and HKD12,500 respectively.
Reducing rental and fees by 50% for six months for Government properties covered by short-term waivers.
Launch of a HKD1 billion pilot scheme for fixed-rate mortgages to help homebuyers.
Issuing inflated-linked retail bonds and Silver Bonds totaling not less than HKD13 billion.
Issuing green bonds totaling HKD66 billion in next 5 years.
Innovation and Technology
Allocation of HKD3 billion for phase 2 of the Science Park Expansion Programme.
Increasing the grant ceiling under the Technology Voucher Programme to HKD600,000 and raising the Government’s funding ratio to 75%.
Tourism, Trade, Cultural and Creative Industries
Additional funding of over HKD700 million for the Hong Kong Tourism Board to step up external promotion.
Additional funding of HKD150 million to assist Hong Kong enterprises in exploring business opportunities.
Additional HKD900 million to further promote sponsorship of culture and arts from all sectors.
Expanding the Researcher Programme and Postdoctoral Hub to cover all technology companies conducting R&D activities in Hong Kong.
Government and Public organisations to increase short-term internship places.
Land and Housing
Potential land supply of 2020-21 is expected to have the capacity to provide about 15,700 residential units.
Production of public housing unit is estimated about 100,400 units from 2019-20 to 2023-24.
Annual production of private housing from 2020 to 2024 is estimated about 19,600 units on average.
Allocation of over HKD300 million recurrent funding to provide 3,000 home care service quotas for frail elderly persons in the coming two years and issue 1,000 community care service vouchers to moderate or severe impairment elderly persons in the coming year.
Allocation of HKD75 million recurrent funding to subsidise elderly service units for providing soft meals to elderly persons with swallowing difficulties.
Devote Resources to Enhance Services
Earmark about HKD500 billion for the two 10-year-Hospital Development Plans, providing 15,000 additional hospital beds.
Recurrent funding to Hospital Authority to be increased to HKD75 billion.
Allocating about HKD180 million to universities to enhance facilities and strengthen professional healthcare training.
Providing an additional HKD3.6 billion to Hospital Authority to retain talents in the 5-year period starting from 2021-22.
Allocating HKD1 billion for the Smart Traffic Fund to subsidise research and application on vehicle-related I&T.
Allocating HKD100 million to develop an integrated digital platform for data integration and information exchange.
Earmark HKD60 million to establish the first Geospatial Lab to promote the application of spatial data.
Launch of a HKD2 billion pilot scheme to subsidise the installation of charging-enabling infrastructure in car parks of private residential buildings.
Earmark HKD80 million and HKD350 million for launching electric public light buses and electric ferries respectively.
Set up a HKD200 million Green Tech Fund to support the R&D and application of decarbonisation and green technologies.
Earmark no less than HKD300 million per year to implement waste paper collection and recycling services.
Summary of Tax Effect on the Proposed Tax Reduction
Year of Assessment 2019/20
Salaries tax and tax under personal assessment (100% tax reduction subject to a cap at $20,000 per case)
|Assessable income||Average amount of tax reduction||Average % of tax reduced|
|$200,000 and below||$740||100%|
|$200,001 to $300,000||$3,420||100%|
|$300,001 to $400,000||$8,450||97%|
|$400,001 to $600,000||$13,380||67%|
|$600,001 to $900,000||$17,560||38%|
Profits tax, 100% tax reduction (subject to a cap at $20,000 per case)
|Assessable profits||Average amount of tax reduction||Average % of tax reduced|
|$100,000 and below||$3,480||100%|
|$100,001 to $200,000||$15,450||94%|
|$200,001 to $300,000||$19,600||74%|
|$300,001 to $400,000||$20,000||55%|
|$400,001 to $600,000||$20,000||40%|
|$600,001 to $900,000||$20,000||27%|