Updated at 5.11pm: Financial Secretary Henry Tang Ying-yen announced no major new taxes in his budget on Wednesday but did unveil some relief measures for wage earners.
Mr Tang told the Legislative Council during his second budget speech that it was not the right time to raise taxes or introduce new ones.
'I believe that, as our economy has only recently begun its recovery, we should leave wealth with the people as far as possible, in order to allow greater flexibility for economic activities,' he said. 'With regard to revenue, I do not propose to introduce new taxes, nor raise existing ones.'
But Mr Tang said some new tax concessions and relief measures were needed. These would target special groups - such as dependant parents and children in Hong Kong.
'As a relief measure, I propose to introduce two new allowances for taxpayers taking care of dependant parents or grandparents aged between 55 and 59,' the Financial Secretary said. These people would be granted a basic allowance of $15,000 a year, with an additional allowance of the same amount if their parents or grandparents were residing with them.
Mr Tang also announced an increase in the child allowance from $30,000 per child to $40,000.
'Some people have suggested that the government should offer tax concessions for children's education. I believe that increasing the child allowance as I have just mentioned is a simpler and more flexible way of easing parents' financial burden in this respect and more people will be able to benefit from it,' he added.