World Economy

HK Slashes Taxes

HK Slashes TaxesHK Slashes Taxes

Workers in Hong Kong will receive a 75% cut on personal income tax, Financial Secretary John Tsang announced on Wednesday.

In his ninth budget speech, Tsang said the income tax cut would be capped at HK$20,000 ($2,570). About 1.9 million taxpayers will benefit from the tax cut. The measure is set to cost the southern Chinese city’s government HK$17 billion, ChannelNewsAsia reported.

Business tax and registration fees would also be slashed to help small- and medium-sized enterprises, said Tsang. In addition, license fees for travel agents, hotels, restaurants and hawkers will be waived, as those sectors have been hit hard by a slump in tourism, Tsang added.

Tsang estimated that the city’s economy would grow between 1 and 2% in 2016. Hong Kong’s economic growth came in at 2.3% year-on-year in the third quarter of 2015, according to data released by the government.

Tsang also announced measures to promote Hong Kong’s movie and fashion industries. The city will inject HK$20 million to promote Hong Kong-made movies in mainland China, and authorities will move to boost the fashion industry, said Tsang.

The financial secretary also expressed surprise towards violent protests in the city’s Mong Kok district during Chinese New Year, saying that the core values of Hong Kong have been threatened by the clashes. He added the actions of radical localist groups–who allegedly incited the unrest–have harmed the city’s tourism industry and reputation.

The clashes, which broke out as police tried to remove street vendors selling snacks and trinkets, injured nearly 130 people. Ray Wong, the leader of localist group Hong Kong Indigenous, has been charged with rioting, while 74 people have been arrested so far.