Hong Kong to record higher-than-expected deficit due to shrinking income from stamp duties, land sales: Paul Chan

Finance chief assures stakeholders that government has no plans to raise salary and profits taxes, expresses confidence in efforts to bring in companies to boost revenue

‘The deficit for the current fiscal year will be a bit higher … mainly because the revenue from the stamp duties and land sales will be less than expected,’ Chan adds

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The finance chief predicted in his budget speech in February that the city would record a deficit of HK$54.4 billion for the 2023-24 financial year. Photo: Dickson Lee

Published: 8:13pm, 26 Oct 2023Updated: 9:34pm, 26 Oct 2023

Hong Kong will record a higher-than-expected deficit in the current fiscal year as shrinking revenue from stamp duties and land sales have taken a toll on government coffers, the finance chief has said.

Seeking to assure stakeholders, Financial Secretary Paul Chan Mo-po on Thursday said authorities had no plans to raise salary and profits taxes, expressing confidence in the city’s efforts to attract “strategic” companies to set up shop and create thousands of jobs that would generate more taxable incomes.

City leader John Lee Ka-chiu a day earlier unveiled a slew of measures to stimulate economic recovery in his policy address, including easing stamp duties covering home purchases and a one-third reduction of the levy on stock transactions, prompting the finance chief to later offer up an adjusted economic outlook.

“The deficit for the current fiscal year will be a bit higher than our original forecast mainly because the revenue from the stamp duties and land sales will be less than expected,” Chan said.

“The measures in the policy address will cost about several billions of dollars every year … but we don’t have any plans to raise taxes, whether it is the salary tax or profits tax.”

The minister predicted in his budget speech in February that the city would record a deficit of HK$54.4 billion (US$6.95 billion) for the 2023-24 financial year.