[Added Xu Zhengyu’s response]The government expects to still record a deficit before 2026, so it is considering levying new taxes to increase revenue. Financial Secretary Chen Maobo attended the joint radio show this morning after his new budget was released yesterday. It was revealed that it had considered increasing salaries tax and profits tax, and roughly estimated that if the tax rate was increased by 1 percentage point, government revenue could increase by 10 billion yuan. However, due to the poor local economic situation, it will not be implemented this year. It will depend on the next year. It depends on the situation. Chen Maobo pointed out that under the severe economic recession in Hong Kong, tax increases should be carefully studied, considering the impact on Hong Kong’s competitiveness, and whether those who can pay more should be paid.
The government is studying the levy of rates in a progressive system. Regarding capital gains tax, Chen Maobo said that the introduction of capital gains tax cannot be absolutely ruled out. At present, different rates of rates are levied according to the type and value of the property. This is the direction of government research. In addition, Chen Maobo pointed out that the property vacancy tax is not to increase income, but to speed up the launch of projects by developers. As for the goods and services tax, which has a greater impact on the grassroots, it needs to be discussed by the society.
Chen Maobo: Investing in stocks is not cheap
Regarding the increase in the stamp duty on stocks, Chen Maobo believes that investing in stocks considers more money than costs, and to “enliven” the stock market is not to fight cheaply, but to think about countermeasures from policy and system innovation. He believes that international investors buying Hong Kong stocks mainly buy mainland stocks because they are optimistic about the development of the mainland.
He believes that other financial markets are not direct competitors in Hong Kong, and Hong Kong has free capital flow in and out, no foreign exchange controls, and no capital gains tax or dividend tax, so he has confidence in the Hong Kong market.
Many legislators questioned the government’s increase in stock stamp duty at the Legislative Council’s budget briefing today. Among them, a passionate citizen Cheng Songtai criticized the government for “slashing the middle class” and believed that Chen’s increase in stamp duty was “pumping water when there is oil and water.” The devaluation of Hong Kong’s status as an international financial center also led to a sharp drop in Hong Kong stocks yesterday, criticizing Chen Maobo: “Designing the budget with the mindset of operating sub-areas is the most fascinating place for the middle-class citizens.”
The Zhang Hua summit in the financial services industry also denounced the government’s wrong decision to increase stamp duty, which caused Hong Kong stocks to plummet by 1,000 points in one day yesterday, evaporating hundreds of billions of assets. Chen Zhenying in the financial sector also pointed out that the global trend is to reduce stamp duty, but Chen Maobo “turned around” and asked whether Chen would adjust the effective date of the bill in response to the reaction of the Hong Kong market.
Facing the siege of congressmen, Chen Maobo was tough on increasing stamp duty and pointed out that the Hong Kong stock market is often subject to volatility and is greatly affected by external factors. “Don’t make a fuss about the fluctuations of one or two days.” Chen Maobo also pointed out that before the government introduced the above policy, it had fully considered the competitiveness of the Hong Kong stock market and the future development space. He claimed that “even if the stamp duty is increased, it is still very competitive.” After hearing this, Zhang Huafeng did not “receive the goods,” and questioned: “Why (the government) should cherish this advantage, why not change it at will?”
Xu Zhengyu: Plan B will be implemented in August
In the afternoon, the Bureau of Finance and the Treasury held a press conference. When the Secretary for Financial Services and the Treasury, Xu Zhengyu, was asked whether he would reconsider the tax increase plan, he responded that the government has a clear goal and the proposal will be implemented on August 1 this year if approved by the Legislative Council. , Emphasize that there is no “Plan B”. He followed Chen Maobo’s caliber, saying that the financial market is not just a “fighting”, but also “fighting well.” The government is considering increasing the stock stamp duty mainly to increase revenue. There is no saying that it wants to control the inflow of north water.
As for the government’s 100% guaranteed personal loans to the unemployed, Xu Zhengyu pointed out that the current internally expected bad debt rate is 25%, emphasizing that it is a supplementary measure to provide people in need with one more option.
The budget also proposes to distribute 5,000 yuan consumer vouchers to the public. It is planned to register through a central platform and then directly deposit them into the registrant’s electronic stored value payment tool account. Xu Zhengyu pointed out that when citizens applied for the 10,000 yuan cash distribution plan last year, they had already filled in the personal information collection statement. If they apply for electronic registration, they do not need to fill in personal information again. They only need to provide a stored-value payment tool for receiving consumer coupons and fill in a personal information statement.
He also pointed out that the authorities are discussing arrangements with multiple stored-value payment facility operators. Popularity and convenience are one of the considerations. In the end, how many operators will participate still needs to be discussed.
Li Zhaobo: There is no right time to increase taxes
Li Zhaobo, a senior lecturer at the School of Business at CUHK, said that the Hong Kong government’s income has been dependent on land sales for many years. Together with rates and stamp duty on buildings, it accounts for 30% of the total income. It is very unhealthy. Now that government spending is getting bigger and bigger, I finally rush to do it.” However, he believes that even if the economy has not fallen into recession recently, there is no suitable time for the government to increase taxes. “There are very few people willing to pay more taxes voluntarily. It is grateful to ask the government to do one or two good things. I think that tax increases are all right for you, but there are too few people of this kind. Besides, the government seems to have done nothing good. Well, social security is not good, the public will definitely question what you are doing for tax increases?”
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