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1998/99 Budget
The 1998/99 Budget at a glance
| Total public expenditure |
$288.89 billion (US$37 billion) |
| Government expenditure |
$233.03 billion (US$29.9 billion) |
| Government revenue |
$258.99 billion (US$33 billion) |
| Consolidated surplus* |
$10.74 billion (US$1.37 billion) |
| Fiscal reserves (at 31-3-98) |
$445.57 billion (US$57 billion) |
*Consolidated Surplus = Revenue-(Expenditure + new Budget revenue measures + equity
investment into Capital Investment Fund).
Despite the economic turmoil besetting the region, the Hong Kong SAR Government
has been able to introduce a range of new tax concessions and lower taxes for individuals
and corporations.
In addition, the government has been able to push ahead with important and substantial
spending on infrastructure, housing development and education programmes at a time
when many governments in the region are tightening their belts.
The reason is the tried and tested policy and practice of limiting spending increases
to within the trend growth rate of GDP over time. Simply put, the HKSAR Government
does not spend any more than it earns.
There is no government debt. Budget surpluses are the norm, which in turn has
allowed the government to accumulate considerable fiscal reserves.
The 1998/99 Budget focuses on sharpening Hong Kong's competitive edge through
several initiatives and specific tax concessions, including:
- Standard rate of corporate profits tax reduced to 16% (from 16.5%);
- Advance ruling service on source of profits;
- 100% write-off for expenditure on manufacturing plant and machinery owned by
end users;
- Widening network of agreements to avoid double taxation;
- Stamp duty on stock transactions cut from 0.3% to 0.25%;
- Concessionary tax rate of 50% of normal profits tax for offshore business or
professional reinsurance companies;
- $500 million (US$64million) for a pilot Credit Guarantee Scheme;
- $274 million (US$35million) for the Industrial Support Fund;
- $500 million (US$64million) promised for Applied Research and Development Scheme;
- Broader tax bands and higher allowances means 99% of people will pay less tax.
The number paying tax at the standard rate of 15% reduced from 71 000 to 10 000;
- $100,000 (US$13,000) a year tax deduction on mortgage rate interest payments;
- $18 billion (US$2.3 billion) Home Starter Loan Scheme to help people buy their
own homes.
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Last updated: June 1998 |
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