CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Tax Cuts Approved By Hong Kong Lawmakers

Tax Cuts Approved By Hong Kong Lawmakers

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

24 May 2007


Relief measures related to salaries tax and tax under personal assessment announced in the 2007-08 Budget have been endorsed by Hong Kong's legislators.

The Revenue (No.2) Bill 2007 was passed at the Legislative Council yesterday and contains four measures to provide personal tax relief.

The first measure is to revert the marginal tax bands and rates of salaries tax to their 2002-03 levels. Each marginal tax band will be widened from HK$30,000 to HK$35,000, and the highest two marginal tax rates will be reduced from 13% and 19% to 12% and 17%.

The second measure is to increase the child allowance under salaries tax from HK$40,000 to HK$50,000 for each child and introduce an additional child allowance of HK$50,000 in the year of assessment in which the child was born.

The third measure is to increase the maximum amount of salaries tax deduction for self-education expenses from HK$40,000 to HK$60,000.

The fourth measure is to reduce the salaries tax and tax under personal assessment for 2006-07 by 50%, subject to a ceiling of HK$15,000. The reduction will be reflected in the taxpayer's final tax payable for 2006-07.

The government said its 2007-08 Hong Kong Budget focused principally on restoring tax relief to the middle class, who bore the brunt of tax increases during harder times.

According to Principal Assistant Secretary for Financial Services and the Treasury Kenneth Cheng, the 40% of Hong Kong's 1.35 million taxpayers with an annual income of HK$200,000 to HK$400,000 would see their tax bills reduced by 70% on average in January next year, depending on their family profile.

Single taxpayers without children earning HK30,000 monthly could see their tax bills reduced by up to 52%, while married taxpayers with children also earning HK30,000 per month could see their tax bill drop by 83% next year, Cheng claimed.

Cheng said that taxpayers earning HK$200,000 to HK$400,000 a year contributed 13.6% of the salaries tax assessed. After the proposed tax concessions are implemented, the figure will be lowered to 12.2%.

A comprehensive report in our Intelligence Report series giving background tax and residence information on many of the key offshore jurisdictions is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report4.asp

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »