Political and Economic Analysis  •  Analyses & Studies

KPMG commentary on the Hong Kong Budget 2024-2025

Hong Kong’s Financial Secretary, the Honourable Paul MP Chan, delivered his 2024-2025 Budget speech to the Legislative Council on 28 February. The Hong Kong SAR Government expects a budget deficit of HK$101.6 billion for the financial year 2023-2024. Despite this deficit, Hong Kong’s fiscal reserves remain at HK$733.2 billion.

During 2023, Hong Kong returned to normality after the pandemic, and enjoyed strong growth in private consumption and a sharp rise in inbound visitors. However, the city’s economy was also impacted by the challenging external environment, including higher interest rates and geopolitical tensions.

In his speech, the Financial Secretary outlined a range of measures to encourage the development of key industries, such as financial services and innovation & technology, including investment in green technology, plans to set up a health-tech hub, and the development of a new AI supercomputing centre at Cyberport.

Other notable measures include all cooling measures in the property market will be removed with immediate effect. Meanwhile, measures to increase Government revenue include a hotel accommodation tax, a progressive rating system for residential properties, and a two-tiered standard rates regime for salaries tax and tax under personal assessment.

A summary of the Budget proposals, together with our comments on the expected impact of these measures, can be accessed through this link. This website also includes links to a range of tax-related topics and other useful tax information.