PwC forecasts that high profits from land sales, tax and stamp duty would buoy fiscal revenue to over $620b.
The Hong Kong government is expected to record a whopping $168b in consolidated budget surplus for the fiscal year of 2017/18 which is over ten times the original government forecast thanks to a robust revenue stream, according to the pre-budget report from global accounting and professional services firm PwC.
The firm predicts that fiscal revenue will hit $621.2b thanks to earnings from various capital measures including land sales, profits and salaries tax and stamp duty in addition to below-budget expenditure.
“PwC predicts total revenues from profits tax and salaries tax will reach HK$219.8 billion. The total revenue from stamp duty is expected to amount to HK$84.1 billion, nearly 60% higher than the Government's previous forecast of HK$53 billion. Taking into consideration the land sales plan published by the Government at the end of December, we expect the land sales revenue for 2017/18 to hit HK$166.3 billion. This is more than 60% of the previously forecast amount,” said PwC Hong Kong Tax Partner Jeremy Choi.
At the same time, expenditure is projected to hit $453.2b which falls short of the government’s original estimate at $491.4b.
The accounting services firm also expressed support over the fiscal prudence and policy directions taken by the administration under CE Carrie Lam to foster innovation-based entrepreneurship and participation in various connectivity projects like the Belt and Road initiatives.
“We believe the policies being pursued by the HKSAR Government will move the territory in the right direction. At the same time, reducing people’s tax burden and making good use of reserves in order to enhance people’s quality of life are also important,” said PwC Hong Kong Tax Partner Agnes Wong.
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