Hong Kong Special Administrative Region (HKSAR) Chief Executive, Donald Tsang, has announced cuts in both salaries and profits taxes in 2008-09, much to the relief of taxpayers in the jurisdiction.
The announcement was made during Mr Tsang's Policy Address to the Legislative Council - the first since his reelection as HKSAR Chief Executive in March 2007.
Mr Tsang said the consolidated surplus for 2006-07 is about $3.5 billion higher than the revised estimate in the 2007-08 Budget. To date, public revenue figures for 2007-08 are better than expected in some areas.
Tsang was quoted by Chinadaily as announcing that: "Given the significance of profits tax on the Government's revenue, I intend to adopt a prudent approach by initially offering a one percentage point cut to 16.5 percent in 2008-09."
These measures will, according to Mr. Tsang, cost the Government about $5 billion a year.
Mr. Tsang added that if the economy remains robust and public finances sound "we will consider further profits tax relief".
To conclude, Mr. Tsang announced that rates for the last quarter of the 2007-08 financial year would be waived, subject to a ceiling of $5,000 for each rateable tenement.
The move will cost the Government $2.6 billion.
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