It is staying competitive against regional rivals.
A South China Morning post report by Nikki Sun said small and medium-sized enterprises in Hong Kong can look forward to more tax incentives as the government tries to counter competition from regional rivals offering lower rates.
"Though the city has been known for its business-friendly environment and low tax regime for decades, it is losing its competitive edge as the rest of the world is redrawing economic policies to attract more business," the report noted.
To ensure the city stops losing young talent to regional rivals such as Singapore, South Korea and mainland China, new Chief Executive Carrie Lam Cheng Yuet-ngor, who took up the top job in Hong Kong last month, has put tax reform on her agenda. Her administration is now in the process of formulating two tax policies, which Lam promised in her election manifesto, favouring SMEs and start-ups.
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