Deloitte Submits Tax Proposals To Boost Hong Kong Economy

by Mary Swire, Tax-News.com, Hong Kong

09 October 2001

International accounting firm Deloitte Touche Tohmatsu has issued an eight point package of economy boosting proposals to the government in Hong Kong, designed to relieve short term hardship and revive the Hong Kong economy.

Speaking about the HK$20 billion package, Yvonne Law, Senior Tax Partner at DTT's Hong Kong branch said: 'These are special short term measures that we propose the Government should implement to ease the economic pain of Hong Kong during this unusual period. They do not, by any means, replace the need to formulate an effective longer term economic policy to ensure sustainable economic growth for Hong Kong.'

The proposals included the unusual suggestion that 10% of salaries tax, profits tax and property taxes could be refunded to taxpayers as retail coupons to be spent in Hong Kong only, double tax deductions for rental expenses on the jurisdiction's shops and restaurants, and a one year 'carry back' provision on operating losses.

DTT also suggested that the government should offer incentives to targeted investments in the region, such as tax exemption of certain income for multinationals which choose to establish their regional headquarters in Hong Kong. 'Because honestly we would have to admit we are not the most favoured place to be used as a regional headquarters,' confessed Ms Law, seemingly unaware that Hong Kong ranked top of a recent Tax-News.com listing of international headquarters regimes.

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