The Financial Secretary has forecast a budget deficit of HKD 101.6 billion for the 2023-24 fiscal year, almost double its original estimate of HKD 54.4 billion. This is primarily due to the significant shortfall in land related revenue and stamp duty revenue. Despite the fourth deficit in five years, Hong Kong’s fiscal reserves remain healthy, at an estimated HKD 733.2 billion as at 31 March 2024.

While having healthy fiscal reserves allows the Government to invest in the future, the external environment is still complicated and uncertain. The Government should make use of the clear positioning for Hong Kong set out in the National 14th Five-Year Plan to strengthen the city’s status as a top-tier international finance and business centre. The Government should also proactively launch targeted policies and campaigns to attract enterprises, capital and talent to Hong Kong. Economic growth will provide the foundation for the Government to achieve fiscal balance in the long run.

Tax is an area of focus for attracting enterprises and talent. In light of the implementation of the global minimum tax in 2025, the Government should perform a holistic review and update the existing tax and other incentives to enhance Hong Kong’s overall competitiveness. We are pleased to see that the Government has adopted our proposal of enhancing certain tax policies and rules including the tax incentives for funds and family offices and removing the time limit for claiming allowances for industrial and commercial buildings and structures. These enhancements should be a positive factor in attracting enterprises to Hong Kong and beneficial to the business environment. 

In summary, we are pleased to see a wide variety of measures proposed to boost the development of the economy and strategic enterprises. These measures will be crucial in maintaining Hong Kong’s competitiveness in the medium to long term and the help the city to maintain sustainable growth.

The information contained in the Hong Kong Budget Summary 2024-2025 is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Legislative proposals do not generally become law until their enactment and may be modified by the Legislative Council before enactment.

It should be noted that the information is presented in summary form and readers are advised to seek professional advice before formulating business decisions.