Photo by Ruslan Bardash on Unsplash

Budget 2024-25: Gov’t cuts salaries and profits taxes

The government will reduce salaries tax for the 2023-24 tax year by 100%, subject to a ceiling of $3,000.

The government has introduced a slew of tax-related measures in the 2024-25 budget, including the reduction of salaries and profits taxes.

In his budget speech, Financial Secretary Paul Chan announced that the government will reduce salaries tax and tax under personal assessment for the 2023-24 tax year by 100%, subject to a ceiling of $3,000.

The reduction will be reflected in the final tax payable for the year of assessment. 

The government will apply the same reduction, also subject to a ceiling of $3,000, to profits tax for the 2023-24 year of assessment.

The reduction will benefit 2.06 million taxpayers and reduce government revenue by $5.1b, whilst the reduction of profits tax will benefit 160,000 businesses and reduce government revenue by $430m.

Apart from salaries and profits tax reduction,  the government will also provide rate concessions for domestic and non-domestic properties, subject to a ceiling of $1,000 for each rateable property.
The measure will involve 3.08 million domestic properties and 430,000 non-domestic properties, reducing government revenue by $2.6b and $370m, respectively.
Meanwhile, the government said it will provide an extra allowance to eligible Social Security recipients 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 $3b

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