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  2. What SMEs Need To Know About The Hong Kong Budget 2022

Author Melissa YeoMelissa Yeo

4 min read
Running My Business

What SMEs Need To Know About The Hong Kong Budget 2022

What SMEs Need To Know About The Hong Kong Budget 2022

Due to the ongoing coronavirus pandemic, the Hong Kong government has announced measures on 23 February 2022 to cushion the financial burden on small- and medium-sized enterprises (SMEs). As Hong Kong faces a new wave of COVID-19 infections, businesses are subjected to the strictest restrictions since the pandemic started in 2020. To mitigate the impact, Financial Secretary Paul Chan has shared that Hong Kong will offer handouts, tax breaks, and subsidies.

Tip

We get that companies are focusing on growing their businesses right now. If you need help with corporate secretarial tasks or outsourcing bookkeeping tasks in Hong Kong, you don’t have to do it on your own. Talk to us to find out how we can help. Meanwhile, here’s how the Hong Kong Budget 2022 can help you according to your business needs.

  1. HK $64 Billion Relief Package

To assuage the impacts of the pandemic faced by individuals and businesses, the Hong Kong government will roll out a HK$64 billion relief package.

Moreover, an additional HK$20 billion will be set aside for the upcoming months to counter the fifth wave of COVID-19.

  1. HK $10,000 Worth Of Consumption Vouchers To Be Given Out

As Hong Kong battles another wave of coronavirus infections, Financial Secretary Paul Chan Mo-po announced that consumption vouchers worth HK$10,000 will be handed out to permanent residents aged 18 and over. This is twice the amount of the HK$5,000 vouchers given out in 2021.

The first half of the consumption vouchers will be given out in April.

  1. Extension Of Loan Schemes To Businesses

To cushion cash flow issues faced by SMEs, Financial Secretary Paul Chan Mo-po shared that the application period of all guarantee products under the SME Financing Guarantee Scheme (SFGS) will be extended. He will also enhance the special 100% Loan Guarantee by raising the maximum loan amount per business from the total sum of employee salary and rents for 18 months to 27 months. Additionally, the loan ceiling will also be increased from HK$6 million to $9 million. The maximum repayment period will also be extended from eight to ten years.

  1. Reduction Of Profits Tax

Profits tax for the year of assessment 2021/22 will be reduced by 100%, subject to a HK$10,000 ceiling. This is to support approximately 151,000 businesses, and will cost the government HK$1.2 billion in revenue.

  1. Reduction Of Salaries Tax

With the imposition of the most stringent restrictions put in place since the start of the coronavirus in 2020, hundreds of small retailers, restaurants, and bars warned that they were merely months away from closure.

Taxpayers can expect a 100% reduction in salaries tax for the year of assessment 2021/22, subject to a HK$10,000 ceiling. This measure is expected to benefit 151,000 businesses and 2.01 million taxpayers liable to salaries tax, and will cost the government HK$14.3 billion.

  1. Concession Rates For Non-Domestic Properties

For four quarters of 2022 to 2023, the Hong Kong government will provide concession rates for non-domestic properties. This is subject to a HK$5,000 ceiling per quarter in the first two quarters, and a HK$2,000 ceiling per quarter for the two remaining quarters for each rateable property.

  1. 75% Waiver Of Water And Sewage Charges For Non-Domestic Households

Non-domestic households will continue to enjoy a 75% waiver of water and sewage charges. This will last for an additional eight months until 30 November 2022, subject to a monthly ceiling of HK$20,000 and HK$12,500 respectively per household.

  1. Waiver Of Business Registration Fees For 2022-23

Business registration fees will be waived for 2022 to 2023, benefitting 1.5 million business operators. This will cost the government HK$3 billion in revenue.

  1. HK$13.2 Billion To Create Jobs In Public And Private Sectors

To assuage Hong Kong’s unemployment issue, the government has earmarked HK$13.2 billion under the Anti-epidemic Fund (AEF)  to bring about approximately 30,0000 time-limited jobs in  both the public and private sectors.

  1. Extension Of Waivers And Concessions For 34 Types Of Government Fees

Existing waivers and concessions for 34 types of government fees and charges will be extended for another 12 months until October 2023. This will benefit a variety of sectors, including maritime, aviation, retail, logistics, construction, catering, agriculture and fisheries, entertainment and tourism. This will cost the government HK$1.7 billion in revenue.

  1. 6-Month Rental Payment Delay For SME Tenants Of Developers

To allow tenants of specific sectors of Hong Kong's property developments to defer payment for up to six months, the Hong Kong government will introduce an unprecedented measure. This measure will be subject to the approval of the Legislative Council. Once this measure has been put in place, property developers will not be permitted to chase tenants for rent.

  1. Continuation Of 75% Rental Or Fee Concession To Eligible Tenants

Eligible tenants of government premises and eligible short-term tenancies and waivers under the Lands Department will continue to enjoy 75% rental or fee concession for an additional six months until 30 September 2022.

  1. HK $500 Million Cash Injection For Agriculture, Fisheries Funds

To support the agricultural and fishing sectors' technological development, the government will make two separate injections of HK$500 million to the Sustainable Agricultural Development Fund and the Sustainable Fisheries Development Fund.

Emerge Stronger From The Crisis

Focus your energy on growing your business, so your company can emerge stronger. Leave your accounting to us, because we know that preparing financial statements yourself is a pain in the neck. We do affordable online accounting for busy founders, with a human expert who has your back 24/7, even late nights and on weekends.


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