Budget 2023: Gov’t lays out measures to support business

Measures include reducing profits tax for the year of assessment 2022-23 by 100%.

The government has unveiled multiple measures under the 2023-24 budget that will support the operations of businesses in the city. 

Amongst the measures proposed by Financial Secretary (FS) Paul Chan was the reduction of profits tax for the year of assessment 2022-23 by 100%. The reduction is subject to a ceiling of $6,000.

Chan said that whilst profits tax reduction will reduce government revenue by $720m, it will benefit  134,000 businesses.

The government also put forward plans to provide rate concessions for non‑domestic properties for the first two quarters of 2023‑24, subject to a ceiling of $1,000 per quarter for each rateable property. The measure will affect 430,000 non‑domestic properties and reduce government revenue by $740m. 
 
Starting July 2023, the government will also grant a 50% rental or fee concession to eligible tenants of government premises and eligible short‑term tenancies and waivers under the Lands Department for six months until the end of 2023.
 
To meet the financing needs of small and medium enterprises (SMEs) during economic downturns, Chan said the government has been enhancing the SME Financing Guarantee Scheme (SFGS) continuously over the years. 
 
“As at end‑2022, loans amounting to more than $230 billion have been approved under the SFGS, benefiting over 53,000 enterprises. As the Hong Kong economy is picking up steadily this year, it is expected that commercial financing will gradually return to be adjusted by the market,” Chan said.
 
“That said, it takes time for SMEs to consolidate their strengths on the way to recovery. I have, therefore, decided to extend the application period of all guarantee products under the SFGS from end‑June 2023 to end‑March 2024, thus giving SMEs more room to adjust and secure a firm footing,” the FS added.
 
Meanwhile, the government also proposed to launch new schemes to offer fully guaranteed loans for eligible passenger transport operators and licensed travel agents in a bid to support cross‑boundary passenger transport and the tourism industry.
 
Chan estimates that the schemes will involve a total loan guarantee amount of about $2.7b.
 
The government will also extend the Travel Agents Incentive Scheme for three more months and inject $30m into the Information Technology Development Matching Fund Scheme for travel agents.