Hong Kong Property—Hong Kong's finance minister on Wednesday pledged modest income tax breaks and waivers on property rates despite the government's ballooning fiscal reserves, in a warning against drawing heavily on the city's coffers in a weak economy.
In his sixth annual budget address, Financial Secretary John Tsang announced 33 billion Hong Kong dollars (US$4.26 billion) worth of relief measures to boost the economy, down sharply from the HK$80 billion worth of measures he introduced last year.
This reduction comes despite his forecast of a HK$64.9 billion budget surplus for the current fiscal year ending March 31, a sharp upward revision from the government's original forecast of a HK$3.4 billion deficit, due to higher income from land sales and property transaction taxes. This year's surplus would help push the city's total fiscal reserves to HK$734 billion.
Mr. Tsang on Wednesday said he expects the city's gross domestic product to grow 1.5% to 3.5% this year, faster than the 1.4% growth posted last year.
Measures Mr. Tsang announced in his address include a one-off reduction in personal income tax for the current fiscal year, to be capped at HK$10,000 per person, down from a HK$12,000 tax break last year.
The government is also waiving property rates—a form of property tax collected quarterly—in the fiscal year starting April 1, subject to a ceiling of HK$1,500 per quarter for each property. Mr. Tsang also announced subsidies on electricity charges.
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