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FS unveils $34 billion in relief measures in 2015-16 Budget

     The Financial Secretary, Mr John C Tsang, has today (February 25) in the 2015-16 Budget announced $34 billion in relief measures.

     "In view of the challenging international macroeconomic environment, the unstable economic factors, the need to boost the local economy in the short term, and Government's relatively sound fiscal position in the short to medium term, I shall increase public expenditure in a prudent manner according to the principle of committing resources as and when justified and needed," he said.
     Relief measures include:

* A 75 per cent reduction in salaries tax and tax under personal assessment for 2014-15, with a ceiling of $20,000. This would benefit 1.82 million taxpayers and reduce government revenue by $15.8 billion;

* A 75 per cent reduction in profits tax for 2014-15, with a ceiling of $20,000. This would benefit some 130 000 taxpayers and reduce government revenue by $1.9 billion;

* A waiver of rates for the first two quarters of 2015-16, with a ceiling of $2,500 per quarter for each rateable property. This would benefit 3.15 million properties and reduce government revenue by $7.7 billion;

* An extra allowance, equivalent to two months of the standard rate of Comprehensive Social Security Assistance, Old Age Allowance, Old Age Living Allowance and Disability Allowance payments. This would mean additional expenditure of $5.5 billion; and

* A payment of one month's rent on behalf of the lower-income tenants living in Hong Kong Housing Authority and Hong Kong Housing Society rental units, involving expenditure of about $1.1 billion.

     Mr Tsang also announced an increase in basic and additional child allowances, from $70,000 to $100,000, beginning in 2015-16. This measure would reduce government revenue by $2 billion a year.

     Mr Tsang said the relief measures should help alleviate the financial burden on the public, stimulate consumption, stabilise the economy and preserve employment.

     "Together with other measures in the Budget, they will have a fiscal stimulus effect of boosting GDP by one percentage point," he said.

     The Financial Secretary said there was also a need "to offset the impact on economic confidence" resulting from last year's occupy movement.

     Mr Tsang also underlined the value of small and medium enterprises (SMEs) to Hong Kong's economy.

     He said Hong Kong's 320 000 SMEs accounted for 98 per cent of all local companies and employed 50 per cent of the private sector's workforce.

     "As the mainstay of our economy," SMEs need support, Mr Tsang said. The Government would inject $1.5 billion into the SME Export Marketing and Development Funds and increase the maximum amount of funding support for each project under the SME Development Fund from $2 million to $5 million.

     The scope of the SME Export Marketing Fund would also be expanded, Mr Tsang said.

     He announced $180 million in targeted, short-term measures to help sectors adversely affected by the occupy movement.

     The measures were:

* Waiving license fees of 1 800 travel agents for six months;

* Waiving licence fees of 2 000 hotels and guesthouses for six months;

* Waiving licence fees of restaurants and hawkers, and the fees for restricted food permits, for six months to benefit 26 000 restaurants and operators; and

* Waiving vehicle examination fees for the renewal of licences once within one year for taxis, light buses, franchised and non-franchised buses, goods vehicles, trailers and special-purpose vehicles.

     Besides affecting local business, the protests had also hurt Hong Kong's international image, Mr Tsang said.

     To rebuild international investor and tourist confidence, the Hong Kong Tourism Board will receive an extra $80 million and the Information Services Department an extra $26 million to boost international promotional and publicity efforts.

     The total package of support measures and promotion efforts, costing $290 million, will render the affected sectors some tangible assistance, help rebuild confidence in Hong Kong, and enhance the city's image.

Ends/Wednesday, February 25, 2015
Issued at HKT 12:34


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