HK's fiscal deficit to reach HK$110bn: PwC
The Hong Kong government will record a deficit of HK$110 billion this financial year, PriceWaterhouseCoopers (PwC) predicted on Tuesday, adding that it should expect to be in the red the following year as well. The auditing firm said the SAR government will likely have smaller-than-expected revenue of HK$651 billion in the 2023/24 fiscal year, along with expenditure of HK$761 billion as envisaged. The government's reserves, meanwhile, will fall to the equivalent of 11 months of expenditure, a month less than the government forecast in February.  In recent months, Financial Secretary Paul Chan has also warned of a deficit of more than HK$100 billion. PwC forecast revenue from land sales to be 56 percent lower than the HK$85 billion Chan predicted in his February budget, while the reduced duty on stock transactions will cut future revenue by 2 percent. Chan had estimated that the city’s fiscal budget would be back in surplus from 2024/25, before growing to HK$983.7 billion by March 2028. Predicting another deficit instead next year, Tax Partner at PwC Hong Kong Agnes Wong advised the authorities not to give people consumption vouchers again. She also urged the government to expedite a review of the city’s preferential tax regimes for investment funds, and to expand the classes of specified assets eligible for family office tax concessions to cover categories such as digital assets, wine, fine arts and collectibles, to attract investment.