Greetings from the Hong Kong Economic and Trade Office!   The Office wishes you health, happiness and prosperity in the New Year of the Monkey! 

 

The Financial Secretary of the Hong Kong SAR Government, Mr John C Tsang, delivered his 2016 Budget Speech yesterday (February 24).  As he outlined, our economy grew 2.4% in 2015, and he projected that our economy would grow 1 - 2 % in 2016.  He forecast that the headline inflation rate for 2016 would be 2.3% with an underlying inflation rate at 2%.   

 

Attached is the leaflet of the 2016-17 Budget for your information please. 

 

Details are available on this website: http://www.budget.gov.hk/2016/eng/index.html. 

 

Some highlights below, among others, that might be of your interest are: 

 

Mr Tsang said Hong Kong's 320 000 SMEs employ 50 per cent of the private sector workforce.  He said he would reduce profits tax for 2015-16 by 75 per cent, subject to a ceiling of $20,000. This proposal will benefit 130 000 taxpayers. Business registration fees will also be waived for 2016-17 to benefit 1.3 million business operators. 

 

To enhance the long-term competitiveness of SMEs, a Pilot Technology Voucher Programme under the Innovation and Technology Fund will be launched to subsidise the use of technological services and solutions to improve productivity and upgrade or transform business processes. 

 

The three-year pilot programme will provide, on a matching basis, a maximum subsidy of $200,000 for each eligible SME. Estimated expenditure is $500 million. 

 

To stabilise the employment market and help SMEs tide over liquidity needs, he introduced three measures: 

 

* Extend the application period for the "special concessionary measures" under the SME Financing Guarantee Scheme to February 28, 2017; 

 

* Reduce the annual guarantee fee rate for the measures by 10 per cent; and 

 

* Remove the minimum guarantee fee for the measures. 

 

Mr Tsang unveiled a number of measures to help the tourism industry, which contributes 5 per cent of Gross Domestic Product (GDP) and employs 270 000 people and is entering a period of consolidation.  Three short-term measures costing $140 million would be introduced: 

 

* Waive licence fees for 1 800 travel agents for one year; 

 

* Waive licence fees for 2 000 hotels and guesthouses for one year; and 

 

* Waive licence fees for restaurants and hawkers and fees for restricted food permits for one year, benefiting 27 000 restaurants and operators. 

 

Mr Tsang also allocated $240 million to launch five medium-term measures: 

 

* Expand the scale of major events this year, including the inaugural Formula E Championship, the Hong Kong Wine & Dine Festival, the Hong Kong Cyclothon and additional Pulse 3D Light Shows at the Hong Kong Cultural Centre; 

 

* Through the Hong Kong Tourism Board (HKTB), repackage Hong Kong's tourism image; 

 

* Through the HKTB, assist the industry to open up new visitor sources; 

 

* Help small and medium-sized travel agents make use of information technology to enhance the competitiveness of the industry; and 

 

* Continue to promote Hong Kong's natural scenery as well as its unique history and culture. 

 

In the long run, tourism infrastructure will continue to be upgraded, including Hong Kong Disneyland, Ocean Park, tourism projects at Kai Tak and Lantau, and new conference facilities above the proposed Exhibition Station of the Shatin to Central Link.