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Hong Kong announced on Wednesday in its 2016-17 Budget a series of support measures ranging from tax cuts to promotion campaigns to boost small and medium-sized enterprises (SMEs) as well as the tourism industry.
Announcing the Budget, Financial Secretary of the Hong Kong Special Administrative Region (SAR) government Tsang Chun-wah said business registration fees shall be waived for 2016-17 to benefit 1.3 million business operators.
Meanwhile, the Budget shall reduce profits tax for 2015-16 by 75 percent, subject to a ceiling of 20,000 HK dollars (2,580 U.S. dollars). Tsang said this proposal will benefit up to 130,000 taxpayers.
Measures were also announced to extend application period for the "special concessionary measures" under the "SME Financing Guarantee Scheme" to February of 2017, and reduce the annual guarantee fee rate for the measures by 10 percent.
To enhance the long-term competitiveness of SMEs, which employ 50 percent of Hong Kong's private sector workforce, a Pilot Technology Voucher Program under the Innovation and Technology Fund will be launched to subsidize their use of technological services and solutions to improve productivity and upgrade business processes.
As for the tourism industry, which contributes 5 percent to Hong Kong's economy and employs around 270,000 people, a variety of license fees shall be removed for business operators while the government shall step up advertising for the sector.
According to the budget report, license fees for 1,800 travel agents, 2,000 hotels and guesthouses shall be waived for one year, restaurants and some other sorts of food sellers will also see license fees eliminated for one year.
In the medium term, the report said government shall allocate 240 million HK dollars (30.96 million U.S. dollars) for government and the industry to jointly launch five measures on expanding the scale of major events to be held this year, re-packaging Hong Kong' s tourism image with new promotional arrangements. In the long run, Hong Kong will seek to upgrade tourism infrastructure, said the report.
The 2016-17 Budget also included measures to ease financial pressure for residents. The report said that local consumption has been a key driver for Hong Kong's economic growth in recent years and easing the burden of residents will have a stimulus effect.
Regarding investment on healthcare, the report said recurrent expenditure on medical and health in 2016-17 is to account for 16. 5 percent of recurrent government expenditure. This represents an increase of more than 90 percent when compared with a decade ago.
