How can Hong Kong narrow down its fiscal deficit

KPMG China projected Hong Kong’s deficit to reach $120.9b in 2022/23.

Hong Kong’s deficit is projected to reach $120.9b, which could be addressed with immediate measures such as the distribution of consumption vouchers, KPMG China recommended. 

Aside from $5,000 worth of vouchers for permanent residents and new arrivals, KPMG China suggested the same could be distributed to permanent residents aged 70 or above. 

Read more: Hong Kong deficit could hit $120.9b in 2022/23: KPMG China

In addition, the Government could also extend a monthly work allowance of $3,000 to newly employed tourism workers during 2023/24 over a three-month period, and the Tourism Industry Additional Support Scheme by providing each eligible licensed travel agent with a one-off cash subsidy.

“In order to attract talent and support business growth, the Government could introduce a tax concession where share-based remuneration offered by strategic enterprises to its Hong Kong employees would be exempt from Salaries Tax,” Alice Leung, Tax Partner, KPMG China, said.

“Apart from this, the Government could provide immigration incentives by shortening the number of years required to obtain a Hong Kong permanent residency from 7 years to 4 years for successful applicants/employees under Quality Migrant Admission Scheme, Top Talent Pass Scheme and certain tax incentives to make it more attractive and comprehensive.”