Tax cuts should boost HK economy, says John Lee
Chief Executive John Lee on Friday said cuts in property and stock trading taxes will hopefully encourage more transactions and propel economic growth – thus sparing the government from a sharp reduction in revenue. The CE had on Wednesday announced a reduction in stamp duties in his latest Policy Address – trimming the stock trading tax from 0.13 percent to 0.1 percent, while halving a special tax on property sales to 7.5 percent.  Speaking on a special RTHK  phone-in programme on Radio 3, Lee stressed the changes are necessary in light of changing conditions and the challenging global economic environment – even if it comes at the risk of a decline in government revenue. "We will receive less tax. But we will see more transactions, hopefully, and the liquidity will increase, which will in turn make more stamp duty to be paid as a result of larger volumes of transactions," Lee said. "How effective all these changes will actually materialise into more transactions, we have to monitor the situation." Asked by a caller whether the changes would frustrate efforts to broaden Hong Kong’s tax base, Lee said that’s not what the government is looking to do at this point. “The global environment is not looking good,“ he said, “so we have to keep ourselves abreast with the times, and that is why we do all this. There is no intention to broaden the tax base at this moment.” The Chief Executive expressed confidence that his newly unveiled policies would benefit the economy at large, and cushion the impact on public coffers. "What we want to do is we increase economic activities, we increase Hong Kong's competitiveness, then as a result of more companies coming to operate in Hong Kong, as a result of different measures we have introduced, then businesses can make more money,” he said. “As businesses make more money, then of course, they will pay more profits tax, and then it will increase our income." Lee also told RTHK that Hong Kong needs to keep pace with its competitors in the global war to grab talent. "If the best people don't get on my boat, [they] will get on other people's boat, and as we sail, that boat will sail faster than us. That's why I am very determined to ensure that we remain very competitive to attract as much talent as possible to Hong Kong," he said.