HK$10,000 vouchers top latest budget sweeteners

All adult Hong Kong residents will be receiving HK$10,000 worth of electronic spending vouchers as the governments opens public coffers again to try to mitigate the effects of the Covid-19 pandemic.

The HK$66.4 billion handout headlines a basket of sweeteners announced by the Financial Secretary Paul Chan in the last budget of the current administration – including tax relief for property renters.

The 6.3 million residents who had previously signed up for last year’s HK$5,000 voucher giveaway will get the first HK$5,000 installment via electronic payment systems in April.

They’ll get the rest in the middle of the year – the same time that an additional 300,000 people who are believed to be newly eligible for the handout will get their vouchers.

“I hope that the scheme will inject impetus to the market when the epidemic is stabilised so as to accelerate economic recovery, and further encourage the public and merchants to use electronic payment which will promote the development of digital economy,” Chan said.

Chan also brought back other familiar one-off sweeteners to alleviate the financial burden on people, including a 100 percent reduction in salaries tax, capped at HK$10,000 per taxpayer.

A new initiative is a proposed tax break of up to HK$100,000 for people who do not own their own property, and are renting a flat.

Chan said the initiative will cost the government HK$3.3 billion in foregone revenue, and a bill will be submitted to Legco in the second quarter of this year.

Other measures include rates reduction of up to HK$5,000 for the year for property owners; an electricity subsidy of HK$1,000 for 2.8 million eligible households; and an extra half-month’s worth of payments for people who receive welfare, old age, disability and working family allowances.

The government will also lower the threshold for the Public Transport Fare Subsidy Scheme from HK$400 to HK$200 from May to October this year.

Commuters will receive a subsidy amounting to one‑third of their actual monthly public transport expenses, subject to a maximum of $500 per month.

Chan said the scheme is expected to benefit about 3.8 million commuters per month.

Businesses will also get a similar support as they received last year.

Profits tax for 2021/2022 will be reduced by 100 percent, capped at HK$10,000.

Other measures include rates concession for non-domestic properties; a waiver of business registration fees; a discount on water and sewage charges, and an extension of rental concessions for some tenants of government properties.

Chan added that the government will extend the application period of all guarantee products under the SME Financing Guarantee Scheme for one year to the end of June next year.