2017-2018 Hong Kong Budget
KPMG China survey highlights and proposals
February 2017
Ayesha M. Lau
Head of Tax, Hong Kong
KPMG China
Alice Leung
Partner, Tax
KPMG China
Stanley Ho
Principal, Tax
KPMG China
Michael Olesnicky
Special Advisor, Tax
KPMG China
In December 2016 and January 2017, KPMG China conducted a survey of over 200 senior
business executives about their concerns regarding business in Hong Kong, and their
expectations of the 2017-2018 Hong Kong Budget. We greatly appreciate their participation
in the survey.
Our key survey findings are highlighted below:
Budget is to strengthen Hong Kongˉs position as an international business centre.
respondents suggest that the existing Salaries Tax bands and/or rates for individuals
should be adjusted. 34 percent support tax deductions for medical insurance expenses.
competitive. However, respondents are divided regarding the tax systemˉs future
competiveness ¨C 49 percent expect that Hong Kongˉs tax system is likely to remain
competitive, whereas 45 percent hold an opposing view.
Other KPMG proposals include the following:
the Stamp Duty for Hong Kong permanent residents purchasing their first residential
property with consideration at or below HKD 5 million for their own use.
aged people for health checks. Also, tax incentives such as enhanced deductions can
be offered for companies employing older employees, thereby preserving this valuable
resource.
in Hong Kong. To encourage investment in business start-ups, we propose that the
government introduce a super deduction for R&D expenses, and provide incentives
(e.g. an accelerated depreciation allowance on capital expenditure incurred on buildings
and structures) to businesses operating in the Hong Kong/Shenzhen Innovation &
Technology Park.
budget should be applied. Tax policy is an effective tool for the government to use
in support of social and economic goals. We suggest that the government adopt
competitiveness as the new value proposition for Hong Kongˉs tax system and set up a
Tax Policy Unit with full-time specialist resources for the research, recommendation and
monitoring of tax policies.
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