Hong Kong's Financial Secretary, Paul Chan Mo-po, delivered his 2025 Budget to the Legislative Council, emphasizing fiscal prudence and a steady path towards restoring the Operating Account's balance. Key initiatives include:
Support Measures: Tax relief for individuals and businesses, including a 100% reduction in salaries tax and personal assessment tax (capped at HK$1,500), and a 100% reduction in profits tax (capped at HK$1,500) for the 2024/25 assessment year. A rates concession for the first quarter of 2025/26 (capped at HK$500 per property) is also included, along with an increase in the stamp duty threshold for property transactions from HK$3 million to HK$4 million. The HK$2 Fare Concession Scheme will be amended to a "$2 flat rate cum 80 per cent discount" system.
Expenditure Control: A pay freeze for civil servants and a two percent reduction in the civil service establishment in 2026-27 and 2027-28, aiming for approximately 10,000 job cuts by April 1, 2027. The Public Transport Fare Subsidy Scheme threshold will increase from HK$400 to HK$500.
Revenue Enhancement: The government will explore regulating basketball betting, increase the air passenger departure tax to HK$200, introduce a HK$600 application fee for talent and capital investor admission schemes, review tunnel and road tolls, and review electric car license fees, parking charges, and traffic fines.
Tourism: HK$1.235 billion will be allocated to boost tourism, focusing on MICE (Meetings, Incentives, Conferences, and Exhibitions) and developing markets in the Middle East and ASEAN. A waterfront development study is planned for Hung Hom.
Green Development: HK$180 million for food waste recycling infrastructure, HK$300 million for electric vehicle fast chargers, HK$470 million for electric buses, and HK$135 million for electric taxis are earmarked. A tender for a new waste treatment facility (I·PARK2) is underway.
Housing and Land Supply: A total of 190,000 public housing units are planned over five years, alongside an average of over 17,000 private residential units annually. Eight residential sites are included in the upcoming Land Sale List.
Attracting Enterprises and Talent: The OASES initiative will announce more than ten strategic enterprises, expected to invest HK$50 billion and create over 20,000 jobs. A "Global Talent Summit" is planned.
Artificial Intelligence: HK$1 billion will fund an AI research institute, and various initiatives support AI development and the adoption of related technologies.
Northern Metropolis: HK$3.7 billion is allocated for infrastructure in the Hetao Shenzhen Hong Kong Science and Technology Innovation Co-operation Zone.
Bond Issuance: HK$150 billion to HK$195 billion in government bonds will be issued over five years, primarily for infrastructure investment and refinancing.
Financial Services: Initiatives include exploring a post-delisting OTC trading mechanism, reviewing listing requirements, and promoting gold market development and virtual asset technology. A cross-boundary payment system linkage with mainland China is planned.
Supporting Local Enterprises: HK$1.5 billion will be injected into SME support funds, and an "E-Commerce Express" initiative will aid local businesses.
Education: A HK$1.5 billion research grant scheme, support for self-financing institutions, and an expanded GBA Youth Employment Scheme are included.
Elderly and Child Care: Increased funding for elderly care vouchers and emergency child care places is provided.
Maritime Development: A new Maritime and Port Development Board will be established, along with investments in port infrastructure and a study on logistics sites in the Northern Metropolis.
Economic Outlook: The economy is forecast to grow by two to three percent in 2025 and average 2.9 percent annually from 2026 to 2029. Underlying inflation is projected at 2.5 percent annually. Other initiatives include consultations on MPF portability and support for construction industry development.