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Relief Measures
26. I am aware that many of our citizens are expecting relief measures from Government to allay their burdens. In view of the challenging international macroeconomic environment, the unstable economic factors, the need to boost the local economy in the short term, and Government's relatively sound fiscal position in the short to medium term, I shall increase public expenditure in a prudent manner according to the principle of committing resources as and when justified and needed, and introduce the following one-off relief measures –
| (a) |
reduce salaries tax and tax under personal assessment for 2014-15 by 75 per cent, subject to a ceiling of $20,000. The reduction will be reflected in the final tax payable for 2014-15. This proposal will benefit 1.82 million taxpayers in the territory and reduce government revenue by $15.8 billion; |
| (b) |
reduce profits tax for 2014-15 by 75 per cent, subject to a ceiling of $20,000. The reduction will be reflected in the final tax payable for 2014-15. This proposal will benefit 130 000 taxpayers in the territory and reduce government revenue by $1.9 billion; |
| (c) |
waive rates for the first two quarters of 2015-16, subject to a ceiling of $2,500 per quarter for each rateable property. It will benefit 3.15 million properties and reduce government revenue by $7.7 billion; |
| (d) |
provide an extra allowance to Comprehensive Social Security Assistance (CSSA) recipients, equal to two months of the standard rate CSSA payments, and an extra allowance to the recipients of Old Age Allowance, Old Age Living Allowance and Disability Allowance, equal to two months of the respective allowances. This will involve an additional expenditure of $5.5 billion; and |
| (e) |
pay one month's rent for lower income tenants living in the rental units of the Hong Kong Housing Authority (HKHA) and the Hong Kong Housing Society (HKHS). Involving an expenditure of $1.1 billion, this measure will not apply to tenants who are required to pay additional rent to HKHA and non-elderly tenants of the HKHS Group B estates. |
27. I have to point out that recurrent measures and one-off measures serve different objectives and purposes. The former addresses recurrent needs of the community, while the latter serves counter-cyclical objectives to provide cushioning effects for the economy and alleviate imminent economic hardships. They are not interchangeable.
28. I raised the child allowances for three consecutive years from 2011-12 to 2013-14. Many parents want Government to provide more specific tax exemptions to ease their burden in taking care of their children. I understand the problems they are facing, but we need also to avoid complicating the tax regime. I shall increase the basic and additional child allowances from $70,000 to $100,000 from 2015-16 onwards. This will reduce government revenue by $2 billion each year.
29. Amounting to $34 billion, the six relief measures above should help alleviate the financial burden on the public, stimulate consumption, stabilise the economy and preserve employment. Together with other measures in the Budget, they will have a fiscal stimulus effect of boosting GDP by one percentage point.
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