Hong Kong Government Introduce Reduced Tariffs for Residents
In order to save enterprises that find themselves in difficult conditions, in Hong Kong they take regulatory measures.
The outbreak of coronavirus COVID-19 has led to a worsening economic situation throughout China, including Hong Kong. The government of the special administrative region began to take measures to stabilize the situation in those fields of the economy that are experiencing the greater difficulties. A one-hundred-percent reduction in income tax, preferential lending, as well as the abolition of business registration fees and duties on non-housing real estate to save businesses, will cost the Hong Kong government more than $ 18 billion.
Speaking on a budget report, Hong Kong Finance Minister Paul Chang said that tax cuts for fiscal years 2020-21 will be available to those whose profits do not exceed $ 20,000. Due to such a forced measure, the budget of the special administrative region is estimated to be short of about $ 2 billion per year, but it is conceivably that this will help more than 140,000 taxpayers cope with the financial difficulties caused by the impact of the spread of COVID-19.
Fees for non-residential real estate will be deferred at least for the next financial year and will not be levied, provided that in each of the first two quarters of the current year the amount does not exceed $ 5,000, and in 3 and 4 quarters does not exceed $ 1,500 for each quarter. The total shortfall in revenues of the Hong Kong budget from non-application of duties on non-residential real estate will be about $ 3.2 billion.
Similarly, Hong Kong’s budget will not receive $ 3.2 billion due to the cancellation of registration fees when starting a business during the current fiscal year. On the other hand, according to government experts, such a measure will provide additional benefits from the operation of 420,000 units of non-residential real estate.
In addition to reducing business expenses for paying duties and taxes, small and medium enterprises will receive support in the form of a soft loan, which is guaranteed by the government and assumes only interest repayment in the first 6 months of use. Depending on the costs of renting real estate and wages over the past six months, a business will be able to count on financial support in the form of a loan with a low interest rate of up to $ 2 million and a term of use of up to three years. This step to save enterprises from the struggling sectors of the economy will be spent on the budget of a special territorial unit of $ 20 billion.
Helping households will cost a budget of $ 100 million
In addition, subsidies for households will be provided in Hong Kong, which will be able to pay only 25% of the cost of utilities, subject to the criteria for applying for subsidies. So when paying for electricity in order to count on a subsidy, the amount should not exceed the equivalent of $ 5,000, when paying for water supply services - $ 20,000 per month, sewage services - $ 12,500. Helping households will cost a budget of $ 100 million.
In order to overcome the impact of the new coronavirus on the Hong Kong economy, the government of the special administrative region will continue the program of a 50 percent reduction in rents for state-owned land and real estate.