Seminar on ‘two sessions’ held

Tax concessions set

A bill to implement the one-off tax concessions and two-tiered standard rates regime as proposed in the 2024-25 Budget will be gazetted on March 8 and introduced into the Legislative Council on March 20, the Government announced today.

 

The Budget has proposed one-off reductions of salaries tax, tax under personal assessment and profits tax for the 2023-24 year of assessment by 100%, subject to a $3,000 ceiling per case. The reductions will be reflected in taxpayers' final tax payable for that year of assessment.

 

The proposals will benefit 2.06 million taxpayers chargeable to salaries tax and tax under personal assessment as well as 160,000 tax-paying businesses. The government revenue forgone in 2024-25 is estimated to be about $5.531 billion.

 

The Budget also proposed a two-tiered standard rates regime for salaries tax and tax under personal assessment starting from the 2024-25 year of assessment.

 

In calculating the tax amount for taxpayers whose net income exceeds $5 million and whose salaries tax or tax under personal assessment is to be charged at a standard rate, the first $5 million of their net income will continue to be subject to the standard rate of 15%, while the portion of their net income exceeding $5 million will be subject to the standard rate of 16%.

 

About 12,000 taxpayers will be affected, accounting for 0.6% of the number of taxpayers chargeable to salaries tax and tax under personal assessment. Government revenue will increase by about $905 million each year.

 

The bill will also give effect to the 2023 Policy Address measure for raising the deduction ceiling amounts of home loan interest and domestic rents for eligible taxpayers so as to aid families with new born children.

 

Additionally, a rating exemption order will be gazetted on March 8 and tabled at LegCo for negative vetting on March 13. It is to implement the one-off rates concession proposed in the Budget for maintaining the economic recovery momentum at the beginning of the financial year.

 

The Budget has proposed to waive rates for the first quarter of 2024-25, with a concession ceiling of $1,000 per tenement. The rates concession will benefit about 3.51 million properties, leading to revenue forgone of about $3 billion.


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