FS unveils cuts to rates and taxes

In his 2024-25 Budget Speech this morning, Financial Secretary Paul Chan announced measures to provide rates concessions, reduce salaries and profits taxes, and pay an extra allowance to eligible social security recipients.

Mr Chan said the measures had been devised in light of the economic pressures faced by some industries and by people, and of the Government’s financial position this year.

In the first quarter of the next financial year, rates concessions for domestic and non-domestic properties will be provided, subject to a ceiling of $1,000 for each rateable property.

The measure is estimated to involve 3.08 million domestic properties and 430,000 non-domestic properties, and to involve a reduction in government revenue of $2.6 billion for the former and of $370 million for the latter.

Meanwhile, salaries tax and tax under personal assessment for the 2023-24 tax year will be reduced by 100%, subject to a ceiling of $3,000, with the reduction being reflected in the final tax payable for the year of assessment. The same reduction, also subject to a ceiling of $3,000, will be applied to profits tax for the 2023-24 year of assessment.

With regard to salaries tax and tax under personal assessment, the reduction will benefit 2.06 million taxpayers and reduce government revenue by $5.1 billion. In relation to profits tax, it will benefit 160,000 businesses and reduce government revenue by $430 million.

In addition, the Government will provide an extra allowance to eligible social security recipients that is equal to half a month of the standard-rate Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance. Similar arrangements will apply to recipients of the Working Family Allowance.

Altogether, the payment of the allowance will involve an additional expenditure of about $3 billion.