28 February 2018
By Steven Kwan
In preparing this Budget, the Financial Secretary has ensured that adequate resources are provided to implement the various policy initiatives put forth in the Policy Address. These measures include the following:
1. Profits tax
• Reducing profits tax by 75% for 2017/18, subject to a ceiling of HKD30,000, effectively giving companies with profits tax payable of HKD40,000 or more a HKD30,000 rebate.
2. Salaries tax and tax under personal assessment
• Reducing 75% of salaries tax and tax under personal assessment for 2017/18, subject to a ceiling of HKD30,000, effectively giving salaries tax payers with a salaries tax payable of HKD40,000 or above a HKD30,000 rebate.
• Widening the marginal bands for salaries tax from the current HKD45,000 to HKD50,000.
• Increasing the number of tax bands from four to five, and adjusting the marginal tax rates to 2%, 6%, 10%, 14% and 17% respectively.
• Waiving rates for four quarters of 2018/19, subject to a ceiling of HKD2,500 per quarter for each rateable property.
4. Child allowance
• Increasing the basic and additional child allowance from the present HKD100,000 to HKD120,000.
5. Dependent parent or grandparent allowance
• Increasing the allowance for maintaining a dependent parent or grandparent aged between 55 and 59 from HKD23,000 to HKD25,000.
• Increasing the allowance for maintaining a dependent parent or grandparent aged 60 or above from HKD46,000 to HKD50,000.
• Raising the deduction ceiling for elderly residential care expenses from HKD92,000 to HKD100,000.
6. Personal disability allowance
• Introducing a personal disability allowance at a rate of HKD75,000.
7. Personal Assessment of Husband and Wife
• Relaxing the requirement of jointly election by allowing husband and wife the option to decide whether to elect for personal assessment independently.
8. Voluntary Health Insurance Scheme
• Proposing annual tax deduction of maximum HKD8,000 per insured person for people who purchase eligible health insurance products.
9. Other relief measures
• Providing a one-off grant of HKD2,000 to each student in need to support learning.
• Paying the examination fees for candidates sitting for the 2019 Hong Kong Diploma of Secondary Education Examination.
• Providing two months' extra allowance to recipients of CSSA, Old Age Allowance, Old Age Living Allowance, Disability Allowance, Low-income Working Family Allowance and Work Incentive Transport Subsidy.
10. Government Bond Programme
• Issuing Silver Bonds to Hong Kong residents aged 65 or above in 2018 and 2019.
11. First Registration Tax for Electric Vehicles
• Waiving First Registration Tax for electric commercial vehicles, electric motor cycles and electric motor tricycles until 31 March 2021.
12. Research and development (“R&D”)
• Provision of additional tax deduction for domestic expenditure on R&D incurred by enterprises, i.e. a 300% tax deduction for the first HKD 2 million qualifying R&D expenditure and a 200% deduction for the remainder.
13. Qualifying Debt Instrument Scheme
• Extending the scope of tax exemption from debt instruments with an original maturity of not less than 7 years to instruments of any duration.
14. Corporate Treasury Centres
• Extending the coverage of profits tax concession to specified treasury services provided by qualifying corporate treasury centres to all their onshore associated corporations.