(Hong Kong, 27 February 2019) Hong Kong Institute of Certified Public Accountants (HKICPA) believes that the 2019-2020 Budget shows the financial secretary (FS) adopting a fairly prudent approach to managing expenditure overall in order to meet the community’s expectations while seeking to solidify the city’s position as a financial service centre, strengthening its role in innovation and technology, and diversifying the economy.

HKICPA understands the challenges the government was facing in preparing for this year’s Budget and finds it reasonable amidst the continuing global economic uncertainty, brought about by the lingering China-US trade conflict and expectations of slower global growth. However, HKICPA believes that there is room for certain more specific tax-related measures to be introduced.

Early in the Budget speech, the FS highlighted the slowdown in Hong Kong’s fourth quarter GDP growth, as a result of external factors, and the weakened business sentiment in Hong Kong. Looking ahead, he also painted a cautious picture of the local economy with growth forecasts of 2-3 per cent in 2019-20 and beyond.

The reallocation of Housing Reserve, established in 2014 to support public housing development, back to the fiscal reserves, over the next four years, will boost medium-term surplus forecasts. “Without this, the Budget could slide into deficit for a year or two, particularly in the event of further negative headwinds. However, the FS is forecasting a surplus of HK$16.8 billion in the consolidated account in the coming year, which means that fiscal reserves are estimated to reach about HK$1.2 trillion by the end of March 2020, equivalent to 39.4 per cent of GDP; so barring any further major shock, Hong Kong’s financial standing should remain in a good shape,” said Mr. KK So, Chairman of HKICPA's Taxation Faculty Executive Committee.

"The FS announced that the Tax Policy Unit (TPU) would be moved directly under his office and will be given more resources, as and when necessary. We hope this means that the TPU will be looking at more strategic tax policy issues, including reviewing the effectiveness of our tax incentives," said Mr Curtis Ng, Convenor of the Budget Proposals Sub-committee, HKICPA.

While the TPU has yet to fulfil some of the expectations practitioners had of it when it was set up, to investigate certain more fundamental tax issues, HKICPA reiterates that the government should expand its remit and expertise to include taxation and industry experts, economists and academics, as well as government representatives. The TPU should study how taxation could help drive the economy, with the aim of achieving a more holistic system that balances the need to maintain a healthy revenue base, while supporting a strong economy and community.

The key tax concessions and rebates, such as profits and salaries tax rebates, and rates waivers, are a continuation of past years' measures, albeit reduced from last year's levels. The extra allowance to be granted to social welfare beneficiaries has been cut to one month’s top-up from last year’s two months’ extra. "In the past few years, personal tax rebates have helped relieve some financial pressure on the middle-class. But given the continuing unaffordability of residential property for many people, we have been advocating an additional allowance of up to HK$100,000 annually for rental payments by taxpayers on their primary residence. The FS suggested last year that something was in the pipeline, so many people will be disappointed to see no mention of this measure in this year's Budget," Mr. Ng explained.

As Hong Kong is now positioning itself as a tech innovation hub in addition to being an international financial centre, the government is committed to supporting research and development (R&D). Therefore, HKICPA urges the government to relax the rules for super deductions of R&D expenses to allow deductions for subcontracted R&D expenses.

HKICPA welcomes the government’s renewed commitment in the Budget towards improving the quality of life in Hong Kong by increasing recurrent funding for the public healthcare system, as well as funding for elderly services and social welfare facilities, in addition to capitalising on the harbourfront development and smart city blueprint, as part of its mission to make Hong Kong a more liveable city.

Last but not the least, HKICPA welcomes the government’s consideration of establishing a limited partnership regime and introducing tax arrangements to attract private equity funds to set up and operate in Hong Kong. This is in line with HKICPA's proposals to the government to enhance Hong Kong's role as fund management centre. The provision of tax concessions for marine insurance and underwriting of specialty risks, and to facilitate them to issue insurance-linked securities, should also help to promote Hong Kong as a ship leasing hub.

經濟環境多變 香港會計師公會認為財政預算案審慎合理

（香港，二零一九年二月二十七日）香港會計師公會認為政府的二零一九至二零二零年度財政預算案，反映財政司司長在管理整體支出上取向審慎，以回應社會訴求，同時鞏固香港作為金融服務中心的地位、加強於創新科技的角色並發展多元經濟。

中美貿易衝突持續及預期環球經濟放緩，為全球經濟帶來不明朗因素。公會明白政府制訂今年預算案時所面對的挑戰，認為預算案整體合理。然而，公會認為香港有空間推行更多具體稅務相關措施。

財政司司長在預算案演說初段，強調受外在因素及本港市場氣氛疲弱所影響，香港去年第四季的本地生產總值增長放緩。他亦對本港經濟預測表示審慎，預計二零一九／二零二零年及往後年度的增長為 2-3%。

二零一四年成立以支持公營房屋發展的房屋儲備金，將會分四年回撥到財政儲備中。中期盈餘預測因此有所提升。公會稅務師會執行委員會主席蘇國基先生表示：「此舉可避免政府的預算可能出現一至兩年的赤字，尤其當經濟進一步逆轉時。儘管如此，財政司司長預計來年會錄得 168 億港元的綜合盈餘，而財政儲備至二零二零年三月底預計約為 12,000 億港元，相當於本地生產總值 39.4%。除受到其他重大外圍衝擊，香港的財政狀況應能保持穩健。」

公會財政預算案建議委員會召集人伍耀輝先生說：「司長宣布將稅務政策組轉移至直屬於財政司司長辦公室，並會按需要增撥資源。公會希望稅務政策組能探討更多戰略性稅務政策事宜，包括檢討現有稅務優惠政策的成效。」

稅務政策組現時職能與初成立時業界期望它能研究一些基礎稅務議題存在落差。公會重申政府應擴大稅務政策組的職能及專業範疇，廣納稅務及行業人才、經濟學家、學者及政府代表。研究如何透過稅務政策推動經濟發展，以達致健全的稅制，在穩健收入基礎與支持穩固經濟民生之間取得良好平衡。

主要稅務寬減及寬免措施，例如利得稅，薪俸稅寬減和差餉寬免，都是延續以往年度的安排，然而寬減額則有所減少。向領取社會保障金額人士額外發放的金額，亦由去年的兩個月減至一個月。伍先生解釋說：「過往幾年的個人稅務寬減措施有助減輕中產人士部分財政壓力。但由於普遍市民住屋負擔沉重，公會建議政府就納稅人的主要居所租金支出提供每年最高 10 萬港元扣除額。司長去年曾提及相關措施已在處理中，但今年預算案則沒有涵蓋這議題，相信不少市民對此會感到失望。」

香港作為金融服務中心之餘，亦銳意發展成科技創新中心，政府在推動科研活動不遺餘力。因此，公會建議政府放寬研發支出的額外稅務扣減規定，容許外判研發的支出可享扣稅。

公會歡迎政府繼續從預算案着手致力提升香港的生活質素，增加公共醫療系統的經常性撥款、對長者服務及社會福利設施增加撥款，以及透過發展海濱和《智慧城市藍圖》等計劃，將香港建設成更宜居的城市。

此外，如公會向政府所建議增強香港的基金管理中心角色，公會歡迎政府研究建立有限合伙制度，並引入稅務配套安排，以吸引私募基金在港成立及營運。為海事及專項保險提供稅務優惠並容許發行保險相連證券的措施，亦有助香港發展成為船舶租賃中心。