(HONG KONG, 18 January 2022) Today, the Hong Kong Institute of Certified Public Accountants (“HKICPA”) has announced its tax policy and budget proposals for 2022-23. Under the theme "Building a Sustainable Future for Hong Kong, its Economy and Community" HKICPA puts forward more than 40 measures, including both immediate and longer-term measures. These are aimed at maintaining the city’s competitive edge, ensuring a sustainable tax system, rolling out relief measures to help businesses and citizens ride through these challenging times, and helping Hong Kong achieve the goal of carbon neutrality by 2050.

HKICPA estimates that the fiscal deficit for 2021/22 will reach HK$25.2 billion. This is significantly less than the government’s original estimation of over HK$100 billion, as a result of better-than-expected economic performance in the second half of 2021 and robust land sales, which indicates that developers have an optimistic outlook for the property market in the coming few years. Fiscal reserves are expected to stand at HK$902.6 billion as at 31 March 2022.

“Despite these positive signs, the situation remains very uncertain”, says Loretta Fong CPA (Practising), President of HKICPA. “The COVID-19 pandemic, particularly the rapidly spreading Omicron variant, is affecting the global economy and impacting Hong Kong, and the government has recently announced a series of new social distancing measures over fears of a new community outbreak. To deal with this and other ongoing challenges, our proposals recommend that the government adopt a number of specific short-term relief measures, while, at the same time, enhancing the Hong Kong economy by promoting digital transformation, and building on the opportunities presented by the development of the Greater Bay Area (GBA). More also needs to be done to maintain our competitive edge and build a sustainable future,” Ms. Fong emphasized.

Community and targeted relief measures

With inbound tourism at a virtual standstill, continuing travel restrictions and limitations on group gatherings still in place, businesses in a number of sectors continue to face operational difficulties, including cash flow problems. These problems will be exacerbated by the latest pandemic restrictions.

“To help alleviate the pressures on businesses and individuals, we propose, among other measures: the introduction of a tax loss carryback scheme, to help businesses badly affected by the pandemic carry back their losses to a previous year where they made profits; a new round of the Consumption Voucher Scheme, amounting up to HK$3,000 for each eligible citizen, to further stimulate local consumer spending and support the retail sector; and a reduction in salaries tax and tax under personal assessment and profits tax of 100%, up to a ceiling of HK$20,000,” explained Sarah Chan FCPA, Chairman of the Taxation Faculty Executive Committee.

HKICPA also proposes introducing a home rental allowance of up to HK$100,000 annually – initially on a temporary basis.

Together, these measures can help to put money back into the pockets of companies and individuals.

Revitalizing Hong Kong’s economy

The vitality and business performance of small and medium enterprises’ (“SMEs”) are of crucial importance to the development of Hong Kong’s economy. However, many SMEs face unprecedented challenges due to COVID, while support in the development of innovation and technology for SMEs is also patchy. Businesses often seem to be unaware of the subsidy schemes that are available for them.

Digitalization has become an especially important issue for SMEs in the post-COVID world. The acceleration of digital transformation is not without challenges. While there are various information technology (“IT”) support schemes to help SMEs digitalize, we believe there is scope for increased consolidation, promotion and outreach to companies.

HKICPA proposes the setting up of a one-stop shop for all the government IT funding programmes. A new measure to provide SMEs with a subsidy to hire an IT specialist, covering 50% of the employment cost (up to a ceiling of HK$16,000 per month) for 36 months should also be introduced. This would be a mutually beneficial arrangement for companies and individuals, for example recent IT graduates.

“To help capitalize on opportunities in the GBA, we suggest relaxing the restrictions on claiming depreciation allowances for certain plant and machinery (P&M), deductions of capital expenditure for the purchase of intellectual property rights (IPR) for use within the GBA, as well as allowing the enhanced deductions for qualifying research and development (R&D) work conducted by Hong Kong businesses in the GBA. While currently there are some restrictions on claims where P&M are used, or relevant R&D work is conducted, outside Hong Kong, we believe that, if the government really wants to encourage greater cooperation and integration with the GBA, then they should treat the GBA as a special case.”, said Eugene Yeung CPA, Convenor of Budget Proposals Sub-Committee.

HKICPA also suggests establishing a dedicated and flexible GBA fund to support development of the Hong Kong professions in the GBA.

The government should also consider tax incentives to targeted industries, such as IT businesses and green industries, to enhance the competitiveness of Hong Kong’s economy and build for the future.

Comprehensive review of the Hong Kong tax system

The latest developments in the international tax landscape, including the European Union’s (EU) review of harmful tax practices and the Organization for Economic Cooperation and Development’s Base Erosion Profit Shifting (“BEPS”) 2.0 project, have brought about significant challenges to Hong Kong’s simple and low-rate tax regime. These developments bring two aspects which primarily affect large multinational companies. BEPS 2.0’s Pillar 2 in particular, which relates to the right to further tax corporate income that is subject to an effective tax rate below 15%, will affect Hong Kong’s low-rate tax regime. Meanwhile, the EU review could require modifications to Hong Kong’s territorial, source-based based system. 

Hong Kong must align itself with international rules, including implementing the Pillar 2 proposals, and addressing the EU’s concerns about harmful tax practices. However, the aim should be to minimize the impact of any changes on businesses that are not within scope, and on the tax system generally.

“Taxpayers want to plan ahead on matters that could significantly affect their profitability, so they need to be kept abreast of the government’s plans in this regard. Given the global developments that directly affect us, various other pressures on the local tax system, and the need to ensure our long-term competitiveness, we continue to recommend that a more extensive review of the tax system should be carried out,” Mr. Yeung added.

Given the likely impact of developments in international taxation, HKICPA also suggests that the government should review Hong Kong’s promotion strategies, and consider offering more non-tax incentives and subsidies. 

Environmental measures to achieve carbon neutrality

The 26^th UN Climate Change Conference, (COP26), was held in Glasgow in October 2021. The conference led to an agreement calling on countries to strengthen their 2030 emissions reduction targets. The Glasgow Climate Pact emphasized the urgent need to accelerate efforts to turn targets into action to keep the limit on the global average temperature rise of 1.5 degrees Celsius within reach. In the 2020 Policy Address, Hong Kong’s chief executive already stated the government’s commitment towards achieving carbon neutrality by 2050. The Environmental Bureau has recently released Hong Kong's Climate Action Plan 2050 (“CAP”) under which the government will, inter alia, pursue more vigorous interim decarbonization targets.

Against this background, HKICPA proposes incentives for the complete replacement of polluting commercial vehicles, and the expansion of the “EV-charging at Home Subsidy Scheme” for electric private cars, as the current plan is already over-subscribed. “The CAP notes that buildings account for about 90% of Hong Kong’s total electricity consumption, and that over 60% of Hong Kong’s carbon emissions are attributable to generating electricity for buildings. “To encourage improved energy usage, we propose offering accelerated industrial and commercial building allowances for green, energy-efficient buildings”, Ms. Chan explained.

Besides these proposals, HKICPA suggests various measures to encourage the adoption of good environmental, social and governance practices and sustainable finance, as well as examine the feasibility of green taxation, and incentives for better energy and resource conservation.

The HKICPA’s proposals include ideas for promoting better fitness and health among the public.

The full budget proposal "Building a Sustainable Future for Hong Kong, its Economy and Community" is available at https://www.hkicpa.org.hk/-/media/HKICPA-Website/New-HKICPA/News/2022/Budget-proposal/Budget_proposal_2022_23_submission.pdf.

香港會計師公會就財政預算案提出建議 冀實現香港可持續發展的目標

(香港，2022年1月18日) 香港會計師公會(「公會」) 今天發表以「為香港建立可持續發展社區和經濟」為題的2022/23年度稅務政策及財政預算案建議。建議內容涉及40多項短期及長期措施。有關建議旨在保持香港的競爭優勢，確保可持續的税制，推出協助企業和市民的紓困措施，並協助香港於 2050 年達致碳中和。

公會估算2021/22年度財政赤字為252億港元，遠低於政府原先估計的逾千億港元。背後的主因是2021年下半年的經濟表現和賣地收入優於預期，反映發展商對未來數年的物業市場前景感到樂觀。截至2022年3月31日，公會預計香港財政儲備約在9,026億港元。

香港會計師公會會長方蘊萱執業會計師表示：「儘管香港經濟開始復甦，但經濟狀況仍然不明朗。新型冠狀病毒肆虐，特別是迅速蔓延的Omicron變種病毒正影響包括香港在內的環球經濟。爲防止新一輪社區爆發，政府早前收緊一系列的社交距離限制措施。我們建議政府推出多項具體短期紓困措施，應對疫情和其他持續不斷的挑戰，同時透過推動數碼轉型和善用大灣區機遇來促進香港經濟發展。」方女士續指：「我們需做更多工作來保持香港的競爭優勢，並建設一個可持續的未來。」

惠及社區及針對性紓困措施

持續的旅遊及羣組聚集限制仍然生效，導致跨境旅遊幾乎處於停滯狀態。受影響的企業面臨包括現金流問題等經營困難，最新的限聚措施將加劇這些問題。

公會稅務師會執行委員會主席陳嘉華資深會計師指：「針對企業和個人，公會建議引入臨時稅務虧損結轉安排，幫助受疫情嚴重影響的企業將其虧損轉回上一個錄得盈利的財政年度。另外，我們建議實行新一輪的消費券計劃，向每名合資格市民派發價值不多於3,000港元的消費券，進一步刺激本地市民消費意欲及支援零售業；及以2萬港元為上限，寬減100%薪俸税、個人入息課税及利得税。」

公會同時建議引入臨時性的租金免稅額，一年最高達10萬港元。這些措施相信能有助紓緩企業和個人的財務狀況。

振興香港經濟

中小企對香港經濟發展尤其重要。然而，許多中小企因新冠疫情而面臨前所未有的挑戰，但現時支援中小企創新及技術發展的措施申請渠道較為零散。許多中小企未必了解現有的資助計劃。

對中小企而言，數碼化成為後疫情一個重要課題。現時雖然已有一定數量的資訊科技(「IT」) 資助計劃協助中小企數碼轉型，但公會相信仍有整合，推廣，以至接觸更多企業的空間。

公會建議為所有政府的IT資助計劃進行整合和提供一站式服務。公會亦提議一項新措施，為中小企提供為期 36 個月的資助，聘用一位資訊科技專才，資助將涵蓋僱用成本的50%(上限為每月16,000港元)。相關的公司及個人(例如應屆畢業的科技人才) 將受惠於計劃。

公會財政預算案建議委員會召集人楊澤志會計師表示：「為幫助企業把握大灣區的機遇，公會建議容許納稅人扣除部份於大灣區內使用的租賃機械及工業裝置(「P&M」) 所產生的折舊免稅額，對於納稅人購買並於區內使用的知識產權(「IP」)的相關的資本支出亦可作扣税。另一方面，為於大灣區內進行並由香港公司控制的研發活動 (「R&D」) 所涉及開支提供額外稅務扣減。雖然現階段在香港以外使用的P&M所牽涉的折舊免稅額不視為扣稅項目，及在海外進行R&D的開支不可作為額外稅務扣減，但公會相信，如政府希望鼓勵加強與大灣區的合作和融合，可將大灣區視為特別例子。」

公會亦建議就大灣區專項設立具彈性的基金，支持香港專業人士在大灣區的發展。

公會建議考慮對指定行業，例如資訊科技企業和綠色產業，提供稅務優惠，提升香港的競爭力，為香港打造更美好的將來。

全面檢討香港稅制

由於國際稅務形勢的最新發展，包括歐盟(「EU」) 就損害性稅務的審查和經濟合作與發展組織「(OECD）」公佈國際稅務改革框架方案 - 「稅基侵蝕及利潤轉移」(「BEPS」) 2.0項目，令香港現行簡單、低稅制帶來重大挑戰。BEPS 2.0由兩條支柱組成，主要影響大型跨國企業。其中，支柱二(「Pillar Two」) 針對相關稅務管轄區進一步徵稅的權利，例如若受控外國實體在某稅務管轄區的實際稅率低於全球最低稅率(15%)，集團的母公司需向所在地就差額繳納額外稅款。這項改變將影響香港的低稅率制度。此外，歐盟的審查亦可能要求修改香港的地域來源徵稅制度。

香港應考慮與國際規則接軌，包括實施支柱二方案，解决歐盟對本港「損害性稅務措施」的擔憂。 然而，應盡量減輕對不在受影響範圍的業務和稅收制度的影響。

楊先生補充：「納稅人普遍期望提前規劃對其營利能力有重大影響的事項，因此需了解政府如何應對國際稅務發展的計劃。考慮到該國際稅務發展將直接影響我們，本港稅收制度面臨的其他壓力以及保持香港長遠競爭力的必要性，我們繼續倡議需對香港的稅制進行更全面的檢討。」

鑑於國際稅制的發展，公會建議政府檢討香港的推廣策略，並考慮提供更多非稅務優惠和補貼。

環保措施達致碳中和

根據2021年10月在英國格拉斯哥舉行的聯合國氣候變化大會COP26達成的協議，各國需在2030年實現更大幅度的減排。《格拉斯哥氣候協定》強調，目前有迫切需要加強力度，切實執行目標，限制全球平均氣溫上升幅度於攝氏1.5度以下。在2020年施政報告中，香港特區行政長官已表明政府對2050年達致碳中和的承諾。根據環境局最近發佈的《香港氣候行動藍圖2050》(「CAP」) ，政府將追求更積極的中期減碳目標。

在此背景下，公會建議提供誘因鼓勵更換污染環境的商用車輛。由於現時推行的《EV屋苑充電易資助計劃》反應熱烈，公會建議進一步擴大計劃。「此外，建築物的用電量佔全港約 90%，因此所需發電而產生的碳排放量則佔全港排放量超過60%。」 陳女士解釋：「為鼓勵改善能源效益，公會建議為綠色節能建築提供更多工商業建築免稅額。」

除上述建議外，公會還建議採取不同措施，鼓勵採用良好的環境、社會和管治 (ESG) 以及可持續金融，並審查綠色稅收的可行性，以及提供誘因鼓勵更具效益的能源和資源使用。

此外，建議亦包括鼓勵公眾多做運動，提倡健康生活之意見。

「為香港建立可持續發展社區和經濟」2022/23預算案提出的建議全文已上載 https://www.hkicpa.org.hk/-/media/HKICPA-Website/New-HKICPA/News/2022/Budget-proposal/Budget_proposal_2022_23_submission.pdf (只有英文)，以供參閱。