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Paul Chan unveils the Budget at the Legislative Council |
Plane
fares from Hong Kong are set to rise by $80 starting in April this year, as
part of the belt-tightening measures announced by Hong Kong Financial Secretary
Paul Chan today, Jan. 26.
The
air passenger departure tax will go up from $120 to $200 from the third quarter
of the year, an increase that Chan said would have “minimal” effect on
passengers.
However,
a whopping $1.6 billion is expected to be generated from this measure.
Chan
also said he is eyeing a $200 levy for each car that departs land borders, which
could add $1 billion to the government coffers each year.
Increasing
annual licence fees for electric vehicles, parking meter charges, as well as
fixed penalty tickets for traffic violators are also, in the offing.
Another
cost-cutting measure would impact elderly residents, who comprise 23% of the
city’s population. From April, the flat fare of $2 paid by those aged 65 and
above when traveling on most public transportation will apply only if it their
ticket price is $10 or below. If higher, they will only get an 80% discount on
the fare.
There
will also be a cap of 240 rides per month (or roughly, about 8 per day) for their
discounted fare.
In
a rare move, the government also announced no salary increase for all civil servants
for the next fiscal year.
In
addition, about 10,000 people on government payroll will be let go to further
trim expenditures.
But
there were also surprise sweeteners in the budget, like the 100% reduction in
salaries tax as well as profits tax. However, the caps set for these benefits
are whittled down by half, or $1,500 instead of the previous $3,000.
Chan
said these concessions will reduce government revenue by $3.1 billion, but will
benefit 2.1 million taxpayers and 165,000 businesses.
Social
security payouts will remain unchanged from last year, with an additional
half-month payment of regular allowances for those receiving Comprehensive
Social Security Assistance, Old Age and Disability Allowance, and Working
Family Allowance.
There
was also good news for those who plan to buy property. The stamp duty of $100
will be collected only if the maximum value of the property exceeds $4 million,
instead of the $3 million set last year.
Overall,
this year’s concessions amount to $8.3 billion in total, down from last years
$11.5 billion.
At
a public forum held after his Budget speech, Chan asked for public understanding
amid criticism that the middle class would be affected the most by the revenue
cuts.
He
said the government needed to effect measures to boost revenue and retain Hong
Kong’s competitiveness, while doing everything possible to lessen the impact of
the new measures on the public.
For
the full Budget speech and related stories, please click this link: https://www.info.gov.hk/gia/general/202502/26.htm