(HONG KONG, 20 January 2021) Today, the Hong Kong Institute of Certified Public Accountants (“HKICPA”) has announced its tax policy and budget proposals for 2021-22. Under the theme "Preparing for the recovery", a range of 21 different measures were suggested to prepare for the recovery, enhance public finance and taxation, help citizens and businesses to adapt to the “new normal” through more extensive digital transformation, as well as environmental measures to improve the local environment and citizens’ well-being. 

HKICPA estimates that the fiscal deficit for 2020/21 will reach HK$348 billion for the year. Fiscal reserves are expected to stand at HK$812 billion. “Hong Kong’s economy is facing various domestic and external challenges. Like many other jurisdictions, the near-total disruption to lives due to the COVID-19 pandemic and the related restrictions on travel, have had a significant impact on the economy, resulting in the high unemployment rate and budget deficit. Other challenges ranging from the outmoded tax system, the US-China trade war, the need for faster digital transformation in light of the ‘new normal,’ and the pressure on public finances, indicate an urgent need for the government to respond,” said Mr. Raymond Cheng, President of HKICPA.

Preparing for the recovery

The unemployment rate for the three months ending December 2020 reached 6.6%, the highest in nearly 16 years. To fight the pandemic and support the economy, the government has announced four rounds of Anti-epidemic Fund measures, but there have only been two rounds of the Employment Support Scheme. 

“More should be done to support employment and the economy now, through creating jobs in both the public and private sectors, and accelerating the scheduled infrastructure/construction projects to create demand,” said Mr. Cheng. 

In respect of helping graduates to enter the job market and ensuring the existing workforce is sufficiently skilled to benefit from the digital transformation, the Institute suggested the government provides salary subsidies to employers for hiring graduates and career transition assistance to eligible people.

Public finance and taxation

The COVID-19 pandemic has revealed the weaknesses of the existing tax system amid the economic turmoil. The record government deficit predicted for 2020-21 is a consequence of its anti-epidemic fund spending supporting the economy as well as the lower revenue estimates due to the downturn in the economy.   

HKICPA has been highlighting the importance of conducting a holistic review of the Hong Kong tax system for the past several years. “A review of public finance revenue model has become even more pressing after developments in 2020,” said Mr. Eugene Yeung, Convenor of Budget Proposals Sub-Committee.

2020 also saw progress, albeit slowed by the pandemic, towards agreement in international taxation through the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting 2.0 project. This will likely require adjustments to the Hong Kong tax system. As a low tax jurisdiction, Hong Kong must ensure that it collects the “top-up tax” levied under these rules. Otherwise, other tax jurisdictions will collect the top-up tax in this zero sum game. “The government should ensure that its tax system is fit for the future, and that Hong Kong continues to be an attractive location for international businesses’ regional headquarters,” said Mr. Yeung.

Adapting to the new normal through more extensive digital transformation 

The pandemic has shown the world the importance of investing in technology and infrastructure that support peoples’ abilities to work from home. One positive consequence of this is the acceleration of the digital transformation of businesses. However, some small and medium-sized enterprises (SMEs) may not be able to afford the cost of digital transformation and effective cybersecurity. 

“Hong Kong’s SMEs in particular are a key part of the economy and may need more assistance to adapt to the digital environment and the new normal. To help SMEs and the business community, the government should consider developing a public cloud infrastructure, upgrading the existing e-government services, and educating the public and SMEs about cybersecurity matters,” said Mr. William Chan, Chair of the Taxation Faculty Executive Committee.

It is important for Hong Kong’s future that everyone has access to technology. Access to the internet has been vital for students to continue learning while schools have been closed. HKICPA recommended that the government supports needy families by subsidizing their internet subscription plans.

Environmental measures 

Concerns about environmental degradation and climate change have been given greater impetus worldwide in recent years. Sustainability and eco-friendly activities are also becoming increasingly important considerations for Hong Kong. HKICPA suggested that the government should make use of the Computer and Communication Products Recycling Programme and distribute refurbished second hand computer devices to needy students. It should consider introducing some tax and non-tax measures based on the “polluter pays” principle.

The government has recently announced its aim to achieve carbon neutrality before 2050. Improving the local air quality can also help improve people’s lives. “To help with improving the local environment, and the quality of life of Hong Kong’s citizens and to reduce the use of fossil fuels, the government should consider measures to promote the usage of electric vehicles and replacing aged commercial vehicles with more efficient models,” says Mr. Yeung.

The HKICPA Hong Kong tax policy and budget proposals 2021-22 "Preparing for the recovery" are available at https://www.hkicpa.org.hk/-/media/Document/APD/Gov-Budget/Budget_proposals_2021-22_submission_210120.pdf.

香港會計師公會就政府財政預算案提意見 為經濟復甦作準備

（香港，二零二一年一月二十日）香港會計師公會今天發表以「為經濟復甦作準備」為題的二零二一至二二年度稅務政策及財政預算案建議，提出21項不同的建議，涵蓋疫情後經濟復甦的部署、加強公共財政及稅務、支援市民及商界在新常態下實行數碼轉型，以及如何透過環保措施改善本港環境及市民生活。 

公會估計，二零二零至二一年度本港的財政赤字約達3,480億港元，而財政儲備則約為8,120億港元。公會會長鄭中正先生指出：「香港經濟正面對不同的內在及外圍挑戰，新冠肺炎疫情及其衍生的外遊限制，令世界各地民眾生活大受影響，香港亦不能倖免。本港經濟受到嚴重打擊，導致失業率高企及大額財政赤字。此外，面對稅制發展滯後、中美貿易戰、新常態下加快數碼轉型的趨勢，以及公共財政壓力等，反映出政府有必要迅速應對。」

為經濟復甦作部署

二零二零年十月至十二期間，本港失業率高達6.6%，是近16年來新高。為應對疫情及維持社會經濟動力，政府實施了四輪防疫抗疫基金措施，但當中只推行了兩輪「保就業」計劃。

鄭先生說：「政府應加大力度保就業、穩經濟，其中可包括於公、私營機構創造就業機會、加快推行已通過的基建及建築項目，以帶動勞工市場的需求。」

為幫助畢業生就業，及確保現有勞動人口具備業務數碼轉型後所需的技能，公會建議政府為聘請畢業生的僱主提供工資補貼，並向合資格人士提供轉職支援。

公共財政及稅務

疫情突顯出香港現有稅制面對經濟不景時的不足。由於政府透過防疫抗疫基金支持經濟活動，政府於二零二零至二一財政年度將錄得歷來最大的赤字，預計庫房收入亦因經濟衰退而減少。

過去數年，公會一直強調香港極需全面檢討稅制。公會財政預算案建議委員會召集人楊澤志先生說：「經歷了二零二零年的種種挑戰，檢討公共財政收入模式更見迫切。」

儘管受疫情影響，經濟合作與發展組織就「侵蝕稅基及轉移利潤2.0」的國際稅收改革，在二零二零年亦取得進展。就此，香港稅制很可能需要作出相應調整。香港作為一個低稅率地區，必須確保能按相關規則徵收「補充稅」。否則，在這零和遊戲中，補充稅將由其他稅收司法管轄區徵收。楊先生表示：「政府應確保本港稅制能切合未來發展需要，令跨國企業仍然樂意在香港設立區域總部。」

透過廣泛數碼轉型應對新常態

新冠疫情加快了商業數碼轉型的步伐，亦揭示了技術及基建投資對遙距辦公十分重要。然而，本港中小企未必能負擔數碼轉型及網絡安全的費用。

公會稅務師會執行委員會主席陳錦榮先生表示：「中小企是香港經濟重要一環。他們可能需要更多支援過渡到數碼化的營商新常態。為協助中小企及商界技術轉型，政府應考慮建設公共雲端平台、升級現有的電子化政府服務，並教育公眾及中小企網絡安全知識。」

市民能否掌握科技應用，對香港未來發展非常重要。學校暫停面授課期間，學生透過網上學習，才能達到「停課不停學」的目標。就此，政府可考慮為有需要家庭提供上網計劃服務費補貼。

環保措施

近年全球日益關注環境及氣候變化問題，香港亦愈來愈重視可持續發展及環境保育。公會建議政府應藉「電腦及通訊產品回收計劃」，向有需要的學童分配復修的二手電腦。政府亦應考慮引入污染者自付原則的稅務與非稅務措施。

另外，政府最近公佈爭取於二零五零年達到碳中和的減排目標。改善本港空氣品質亦有助提升市民的生活質素。楊先生說：「為改善本港環境及市民生活質素，並減少使用化石燃料，政府應推出激勵措施，鼓勵市民使用電動車，並以較具能源效益的車款取代陳舊商用汽車。」

公會就二零二一至二二年度稅務政策及財政預算案提出的建議全文已上載 https://www.hkicpa.org.hk/-/media/Document/APD/Gov-Budget/Budget_proposals_2021-22_submission_210120.pdf，以供參閱。