KPMG China recently conducted a survey of over 300 senior business executives about their business concerns in Hong Kong and their expectations regarding the 2018-2019 Hong Kong Budget. Our key survey findings are highlighted below:
Top priority for the 2018-2019 Hong Kong Budget
- Almost half of the respondents consider strengthening Hong Kong’s position as an international business centre as the top priority for the 2018-2019 Hong Kong Budget.
- Other respondents suggest capturing the ’Belt and Road’ and Greater Bay Area opportunities, and focusing on youth support.
Enhancing the competiveness of Hong Kong’s tax system
- According to the respondents, the most effective measure to enhance competitiveness is introducing a tax incentive for regional headquarters.
- Other views include introducing group tax loss relief and expanding the scope of tax exemption for funds.
Measures/new tax incentives targeting the middle class in Hong Kong
- The majority of respondents suggest that the existing Salaries Tax bands and/or tax rates for individuals should be adjusted.
- Other respondents prefer allowing a tax deduction for medical insurance premiums paid and introducing a working mother allowance.
Tax measures to promote R&D activities in Hong Kong
- Results show that respondents equally support all three of the proposed measures for promoting research & development (R&D) activities in Hong Kong (i.e. ‘expand the scope of “approved research institutions” for R&D tax deduction purposes’, ‘allow tax losses incurred from R&D activities to be cashed out instead of being carried forward’ and ‘expand the scope of deductible intellectual property-related capital expenditure’).