CPA Australia calls for enhanced two-tier consumer vouchers and quarantine tax deduction | Taiwan News
HONG KONG SAR – Media outreach – 27 January 2022 – News Faced with a fifth wave of Covid-19, Hong Kong’s near-term economic outlook is increasingly uncertain, according to one of the world’s largest professional accountancy organisations. To build trust and protect recent economic gains, CPA Australia recommends the government introduce an enhanced version of the electronic consumer voucher in the next budget.
CPA Australia estimates that the Hong Kong SAR government will run a budget deficit of HKD 37.1 billion for 2021-22 and budget reserves will be HK$865 billion. These estimates take into account revenues, expenditures and projected adjustments for the year.
Improve the standard of living
Mr. Anthony Lau, Co-Chair of the CPA Australia – Greater China Tax Committee, said: “As one of the early proponents of consumer voucher distribution to support the local economy, we are delighted to see better-than-expected results from Our members tell us the program has supported many businesses by increasing customer spend and accelerating digital transformation.
“This year, we recommend the government consider offering an enhanced two-tier version of the scheme to help defend the economy against the fifth wave of Covid-19 by boosting local consumption. Subject to affordability, the base amount could be up to HK$3,000 for all eligible Hong Kong residents The second tier, targeting vulnerable groups such as low-income people, could receive an additional payment of up to $3,000 to alleviate their financial burden.These vouchers will continue to promote the adoption of digital payment technologies in Hong Kong.
“Furthermore, we recommend that the government consider introducing a one-time tax deduction for quarantine expenses for hotel accommodation with a suggested cap of HK$50,000, as well as introducing a one-time tax deduction for additional costs incurred by employees working from home, capped at approximately HK$8,000.
“Other measures could include increasing child allowance to HK$150,000 per child and extending dependent parent allowance and dependent grandparent allowance to include dependent parents and grandparents residing outside of Hong Kong.”
Increasing labor to supply
Mr. Janssen Chan, co-chair of the CPA Australia – Greater China Tax Committee, said: “According to the latest government figures, a monthly average of over 100,000 private sector vacancies was recorded in the fourth quarter. 2021, representing an increase of nearly 75 percent. Labor and talent shortages at this level pose a real risk to Hong Kong’s long-term economic growth and competitiveness.
“OWe recommend that the government consider introducing measures to address this issue, such as allowing non-local students to stay longer in Hong Kong. This could be done by extending the original 12 month time frame provided by the immigration provisions for non-local graduates.
“Faced with the twin challenges of labor and talent shortages and an aging population, the government should encourage more employers to hire or re-employ Hong Kong residents aged 60 and over. To achieve this, we suggest increasing the maximum number of on-the-job training allowance for employees aged 60 and over under the employment program for the elderly and middle-aged to HKD 8,000 The government should also consider introducing an additional wage tax deduction for companies that hire employees aged 60 and over, with a suggested cap of HKD $120,000 per employee per year. enough resources to address these perennial societal problems.
Chan said: “We are delighted that the government has acted swiftly in response to the fifth wave of Covid by announcing additional support for hard-hit sectors through the HK$3.75 billion fifth round of the Anti-Epidemic Fund. . However, based on experiences in other markets, we expect the negative business impacts of this wave to last several months, especially for SMEs.
“Given the uncertain short-term business outlook created by the fifth wave, we suggest the government consider introducing a series of measures to support SMEs. These include extending the maximum duration of the main moratorium to 30 months for the 80% guarantee product, 90% Special 100% Loan Guarantee and Special 100% Loan Guarantee under the Loan Guarantee Program for SME Finance The application period for the Special Loan Guarantee Program 100% loan guarantee for SME financing is also expected to be extended until the end of 2022. The program is expected to be extended until the end of October 2022.
Lau added: “Sixty-seven percent of members surveyed recently said they were waiting for details of family office tax relief before taking action. We therefore suggest that the government expedite the publication of the tax relief scheme for family offices.
Tax reform measures
Lau said: “Eighty-four percent of members surveyed think changes should be made to Hong Kong’s tax system in response to the city’s inclusion in the European Union’s ‘grey list’ of jurisdictions. In addition, 39 percent believe that the proposed global minimum tax regime will be a major concern for their organization’s growth goals.
“With these developments creating uncertainty for business, we suggest the government announce steps to address the city’s inclusion in the ‘grey list’ and provide details on how they will respond to BEPS 2.0, including clarification on the implementation of a domestic minimum tax.
“To maintain Hong Kong’s international competitiveness in a changing tax environment, we suggest the government should commission a comprehensive reform of the tax system. Such a review should focus on the three ‘Cs’ – certainty, clarity and consistency.”
About CPA Australia
CPA Australia is one of the largest professional accountancy bodies in the world, with over 168,000 members in over 100 countries and regions, including over 21,000 members in Greater China. CPA Australia has operated in Hong Kong since 1955 and opened its Hong Kong office in 1989. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accountancy profession and the public interest. We work with governments, regulators and industries to advocate for policies that drive sustainable economic growth and have positive business and public outcomes. Learn more about cpaaustralia.com.au
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