Hong Kong Budget 2020: Government Unveils Unprecedented Support Package For Individuals And SMEs

The 2020-21 Hong Kong Budget was recently presented by Financial Secretary, Paul Chan, on 26th February.

For Hong Kong 2019 was, without any doubt, a year of some of the most challenging times, including economic uncertainties due to the US-China trade conflict, and unprecedented social unrest. The outbreak of COVID-19 at the beginning of 2020 has further compounded the challenges Hong Kong is facing, and yet many still remain positive for the future.

The 2020-21 Budget puts its focus on "supporting enterprises, safeguarding jobs, stimulating the economy and relieving people's burden". We have summarised the key points from the Budget that are likely relevant to many of our clients' businesses:

Support Enterprises and Safeguard Jobs

For enterprises, new relief measures include:

1. Introducing a concessionary low-interest loan under the SME Financing Guarantee Scheme, under which 100% guarantee will be provided by the Government. The application period will last for six months. The maximum amount of loan for eligible enterprises is based on their salary and rental expenditures for six months, subject to a ceiling of HK$2 million. The repayment period is up to three years and, on an opt-in basis, a principal moratorium is available for the first six months during which only interest payments must be made. The Government will provide guarantee of up to HK$20 billion under this concessionary loan scheme;

2. Reducing profits tax for the year of assessment 2019/20 by 100%, subject to a ceiling of HK$20,000. The reduction will be reflected in the final tax payable for the year of assessment 2019/20. This will benefit 141,000 taxpayers and reduce government revenue by HK$2 billion;

3. Waiving rates for non-residential properties for four quarters of 2020-21, subject to a ceiling of HK$5,000 per quarter in the first two quarters and a ceiling of $1,500 per quarter in the remaining two quarters for each rateable non-residential properties. This proposal is estimated to benefit 420,000 non-residential properties and reduce government revenue by HK$3.2 billion;

4. Waiving business registration fees for 2020-21. This will benefit 1.5 million business operators and reduce government revenue by HK$3 billion;

5. Waiving registration fees for all annual returns (except for late delivery) charged by the Companies Registry for two years. This will benefit about 1.4 million companies and reduce related revenue by about HK$212 million in total;

   The following...