Greetings from the Hong Kong Economic and Trade Office (HKETO) in Singapore.

The Financial Secretary of the Hong Kong Special Administrative Region Government, Mr Paul Chan, unveiled the 2021-22 Budget on 24 February. Please see below some of the major highlights. Kindly note that all currencies shown are denominated in Hong Kong dollars.

Economic Performance in 2020

- GDP: 6.1%
- Unemployment rate: 5.9%
- Headline inflation: 0.3%; underlying inflation: 1.3%

Economic Prospects for 2021

- GDP growth of 3.5% to 5.5%
- Headline inflation: 1.6%; underlying inflation: 1%

Revenue and Expenditure

Total Government Revenue 2021-22
- $591.1 billion
(Profits tax: $126.7b; Land premium: $97.6b; Stamp duty: $92b; Investment income: $84.6b; Salaries tax: $64.4b; Other revenue: $125.8b)

Total Government Expenditure 2021-22
- $727.8 billion
(Social welfare: $120.6b; Health: $115.8b; Education: $110.9b; Infrastructure: $84.1b; Economic: $81.6b; Security: $62.4b; Environment and Food: $35.3b; Others incl. community and external affairs: $117.1b)

Estimated Deficit 2020-21
- $257.6 billion

Estimated Deficit 2021-22
- $101.6 billion

- Issue green bonds to finance green projects and increase government's fiscal space
- Review rating system to look for areas of improvement
- Reduce expenditure: Zero growth in civil service establishment in 2021-22
- Increase revenue: Raise stamp duty on stock transfers from 0.1% to 0.13%

Measures to support enterprises, revive and stimulate the economy

(A) Support for enterprises

- Extend application for low-interest loan guarantee scheme and raise loan limit to $6 million
- Reduce profits tax for 2020-21 up to maximum of $10,000
- Rates concession for non-domestic premises ($5,000 for first two quarters; $2,000 for second two quarters)
- Waive business registration fees
- Waive 75% of water and sewerage charges for non-domestic premises for 8 months (monthly ceiling of $20,000 and $12,500 respectively)
- $6.6 billion to create 30,000 time-limited jobs

(B) Revive Economy

- $5,000 e-vouchers for each eligible permanent resident aged 18 or above to boost local consumption
- $1.5 billion for dedicated fund on branding, upgrading and domestic sales
- $375 million for HKTDC to assist young business starters promote original products
- $934 million to support tourism

(C) Stimulate Economy

Financial services
- Issue at least $24 billion in silver bonds and lower age limit from 65 to 60
- Issue at least $15 billion in iBonds
- Issue green bonds totalling $175.5 billion over next five years; plan to issue retail green bonds
- Subsidise Open-ended Fund Companies to set up or re-domicile in Hong Kong
- Review tax arrangements relevant to family office business

Innovation and Technology
- $200 million for school IT programmes
- $9.5 billion for Innovation and Technology Fund in two instalments
- Continue to press ahead with Science Park expansion and Cyberport 5 development
- Support development of 5G networks and apps
- Commence first batch of 20 R&D labs under the "InnoHK Research Clusters"

Building a Liveable City

- Roadmap on popularisation of electric vehicles, including ceasing new registrations of fuel-propelled private cars by 2035 or before
- Update Clean Air Plan for Hong Kong by mid-2021
- Increase first registration tax bands for private cars by 15%; Increase vehicle licensing fees by 30%
- $555 million to enhance facilities in Country Parks and improve hiking trails
- $300 million to upgrade soccer pitches

Housing and Land

- Supply of about 16,500 units from land sale programme as well as railway and private developments/redevelopments in 2021-22
- 3 commercial sites to provide about 480,000 sq m of floor space
- 860 hectares of brownfield sites in the New Territories expected to become available for housing and other land use
- Estimated production of 101,400 public housing/subsidised units in 2020-21
- Estimated production of 18,000 private units a year on average for the five years from 2021

For more comprehensive information including the full budget speech, leaflet and video links, please refer to the Website:

HKETO, Singapore
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