The HKSAR’s Chief Executive, Carrie Lam, has just released her first Policy Address following the CE election victory in March. The Business Students’ Union, HKUSTSU would like to present you our Current Business Affairs News Flash to summarise the business and economic policies enclosed in the paper.
As promised in the Election Manifesto of Lam, a rate of profit tax rate reduction is going to take place within 2018. Profit tax rate for the first $2 million HKD of profits of enterprises will be lowered to 8.25%, or half of the standard profit tax rate. Meanwhile, eligible $2 million HKD R&D expenditure will enjoy a 300% tax deduction and the remainder will enjoy 200%. The taxation policy is specifically targeting small and medium enterprises (SME) that restriction will be introduced to prevent abuses.
The government also announced a series of housing policies which aims at “re-igniting the hope of families with higher income to own a home”. The highlight of the housing policies include the initiative to collaborate with private developers to build and offer a specified number of “Starter Houses”, in which ownership discounts will be given to citizens who have never possessed private property. A residential site at Anderson Road, Kwun Tong was preliminarily selected to provide ~1,000 residential flats. Assessing on the income, assets and residency restriction, property analysts estimate that around 55,000 families will be eligible to apply for the “Starter Houses”. However, it is difficult to draw conclusion to the impacts on private property markets as details of the Program will not be finalised and announced by 2018.
On Innovation and Technology
In the Policy Address, the government promises to promote local financial technologies (Fintech) development and encourage industries to experiment with innovative businesses. The Hong Kong Monetary Authority (HKMA) will launch the Faster Payment System (FPS) in 2018 to encourage adoption of innovative retail payment products, as well as promote healthy competition between banks and non-bank payment service providers, by allowing banks and Stored Value Facilities (SVF) to undergo real-time settlement and transfer, while the Government and the Mandatory Provident Fund Schemes Authority (MPFA) is also commencing their work with 14 trustees operating MPF Scheme on centralized electronic platform to enhance administrative efficient on the MPF Schemes which ultimately aim for fee reduction.
On Transportation Services and Logistics Industry
Major Infrastructures such as Hong Kong International Airport, Air Mail Centre will be expanded to cater the ever-increasing demand of air freight and cross-border delivery services at the age of E-Commerce. Collaboration with other regions are also ongoing to secure the status of Hong Kong as a diversified international logistics centre - bilateral agreements have been signed to strengthen cross-boundary cooperation in order to enhance efficiency of the transportation services and logistics industry.