To address the financial challenges and optimize public expenditure, CPA Australia has proposed a series of innovative measures aimed at enhancing government revenue while fostering economic growth. These recommendations encompass a broad spectrum of strategies, from adjusting fines and duties to attracting foreign investment and supporting small businesses.

Transforming Economic Policies for a Brighter Future

Enhancing Government Income Through Innovative Strategies

CPA Australia envisions a robust framework for generating additional revenue streams in Hong Kong. One of the key proposals is the expansion of user-pays models across various government services. This approach ensures that fees remain within affordable limits for the general public while boosting fiscal resources. By aligning service costs with usage, the government can achieve greater efficiency and fairness in public spending.Moreover, increasing penalties for infractions such as illegal parking can serve as an effective deterrent and contribute to city coffers. The proposal also calls for raising tobacco duties to align with World Health Organization guidelines, which recommend a 75% tax rate. This adjustment not only enhances revenue but also promotes public health by discouraging smoking.

Promoting Sustainable Growth Through New Taxes

Introducing new forms of taxation is another cornerstone of CPA Australia’s strategy. A digital services tax targeting major tech companies could provide a significant boost to government funds. This measure would ensure that large digital platforms contribute equitably to the economy, reflecting their substantial market presence and influence.Additionally, implementing a carbon tax on major greenhouse gas emitters aligns with global efforts to combat climate change. Such a tax would encourage industries to adopt greener practices while generating revenue that can be reinvested in sustainable initiatives. This dual benefit positions Hong Kong as a leader in environmental responsibility and economic innovation.

Attracting Investment and Stimulating the Property Market

To bolster Hong Kong’s appeal as an investment hub, CPA Australia recommends expanding tax exemptions for local real estate investments under unified fund exemption and single-family office concession regimes. These adjustments would make Hong Kong more attractive to international investors, fostering a vibrant financial ecosystem.Furthermore, a proposed 50% reduction in stamp duty for first-time homebuyers aims to stimulate the property market. This initiative provides much-needed financial relief to young buyers, making homeownership more accessible and injecting vitality into the housing sector. By easing the burden on this demographic, the policy supports long-term economic stability.

Empowering Small and Medium-Sized Enterprises

Small and medium-sized enterprises (SMEs) are the backbone of any economy, and CPA Australia recognizes their pivotal role. Increasing the threshold for the half profits tax rate from $2 million to $3 million offers SMEs greater financial flexibility. Additionally, a 100% tax rebate on the 2024/25 final profits tax, capped at $10,000, provides immediate relief and encourages business growth.These measures aim to create a supportive environment for SMEs, enabling them to thrive and contribute significantly to the economy. By fostering entrepreneurship and innovation, Hong Kong can cultivate a dynamic and resilient business landscape.

Addressing Workforce Shortages Through Incentives

Workforce shortages pose a challenge to economic progress, and CPA Australia proposes targeted incentives to mitigate this issue. Introducing additional tax deductions on salaries paid to employees aged 60 or above encourages businesses to hire older workers. Alternatively, direct wage subsidies for eligible older employees offer another viable solution.These incentives promote inclusivity and leverage the valuable experience of senior workers. By fostering a diverse and experienced workforce, Hong Kong can enhance productivity and maintain its competitive edge in the global market.