Strong fiscal reserves reflect underlying strength of Hong Kong economy, Business News

Targeted relief measures and continued spending in the 2022-2023 budget are essential to spur economic recovery; Strong government support highlighted as essential to ensure city’s long-term competitiveness amid 5th wave of pandemic

HONG KONG, February 25, 2022 /PRNewswire/ — KPMG welcomes the Hong Kong SAR Government’s budget (the “Budget”) which will provide assistance to industries and people affected by the ongoing COVID-19 pandemic. Despite the projected fiscal deficit in 2022-23, the government’s fiscal reserves remain strong, underscoring the resilience of the hong kong economy.

John TimpanyHead of Taxes at hong kongKPMG Chinasaid:The projected deficit is not a concern. The strong fiscal position gives the government ample capacity to respond to support hong kong through the current difficulties. Given the continuing uncertainties in the global economy, we agree with the Finance Secretary that now is not the time to introduce new taxes, although impending international tax changes will impact that of Hong Kong traditional low-rate tax system.

Alice LeungTax Partner, KPMG Chinasaid:We welcome the publication of HK$10,000 electronic consumer vouchers and are pleased to see that the first batch of vouchers will be issued quickly. Also, since the pandemic is severe and people are not encouraged to go out to spend money, it is wise to issue the vouchers in April to coincide with the government’s estimate of when the outbreak will be contained. Although the recently announced unemployment rate remained at 3.9%, it is expected to increase in the next quarter due to the fifth wave of the epidemic and the data lag. We therefore also welcome the government’s decision to allocate HK$13.2 billion for the creation of fixed-term jobs in the public and private sectors under the Anti-Epidemic Fund.”

Stanley HoTax Partner, KPMG Chinasaid: While we welcome the measures proposed in the budget to support businesses (e.g., corporate income tax relief), we suggest that the government continue to monitor the pandemic and economic development by considering the one-time measure of “negative tax rate” that we have previously proposed, which would provide a one-time subsidy (i.e. capped at approximately HK$100,000) for the first HK$600,000 tax losses incurred by eligible businesses. We welcome the proposal to introduce a tax incentive scheme for family offices and the tax half-benefit to encourage more maritime businesses to establish themselves in hong kong. We believe that the proposals will enhance the attractiveness of hong kong and create more business and job opportunities for these industries.”

KPMG also urged the government to continue to monitor the epidemic and economic development considering several measures it has proposed before, including a 3-month deferral of interim payroll tax payments and a 50% exemption. temporary wage tax. Meanwhile, he welcomed the government’s adoption of his proposal to provide a tax deduction for inland rental charges in support of taxpayers’ salaries.

About KPMG China

KPMG China is based in 31 offices in 28 cities and has more than 14,000 partners and employees in beijing, Shanghai, Chengdu, Chongqing, Dalian, DongguanFoshan, Fuzhou, Canton, Haikou, Hangzhou, Hefei, jinan, Nankeen, Ningbo, Qingdao, Shanghai, Shenyang, ShenzhenSuzhou, Taiyuan, Tianjin, Wuhan, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macao SAR. By working collaboratively across all of these offices, KPMG China can effectively deploy experienced professionals wherever our client is located.

KPMG is a global organization of independent professional services firms providing audit, tax and advisory services. KPMG is the brand under which member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or collectively one or more member firms.

KPMG firms operate in 145 countries and territories with more than 236,000 partners and staff working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and responsibilities.

KPMG International Limited is an English private company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

In 1992, KPMG became the first international accounting network to be granted a joint venture license in mainland China. China. KPMG was also the first among the continent’s Big Four China convert from a joint venture to a special general partnership, effective on August 1, 2012. Moreover, the hong kong company can trace its origins to 1945. This early commitment to this market, coupled with an unwavering attention to quality, has been the foundation of accumulated industry experience and is reflected in KPMG’s nomination for multidisciplinary services ( including audit, tax and advisory) by part of China most prestigious companies.

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