Budget 2025: how is Paul Chan planning to balance Hong Kong’s books?
Finance secretary lays out new and increased fees to boost revenue and a string of cutbacks to reduce government’s expenditure
Financial Secretary Paul Chan Mo-po has come under pressure to prudently manage Hong Kong’s finances after the city recorded deficit of HK$87.2 billion (US$11.2 billion), with pundits hoping the budget revealed on Wednesday can balance the books.
The Post looks at Chan’s game plan to cut the government’s spending and increase its revenue sources.
New or increased charges
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The city’s air passenger departure tax will be increased from HK$120 to HK$200 in October. The move is likely to boost the government’s revenue by about HK$1.6 billion each year.
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Various talent and capital investor admission schemes now include a HK$600 application fee. Visa fees have been raised to either HK$600 or HK$1,300, depending on the duration of the applicant’s limit of stay under the schemes. The move is expected to raise HK$620 million for the government each year.
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The government will also review various charges, such as annual licence fees for electric vehicles, parking meter charges and fixed penalties for traffic offences – potentially bringing in an extra HK$2 billion.
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A boundary facilities fee levied on private cars departing via land-based border crossings is also being considered. A charge of HK$200 per car could bring in another HK$1 billion annually.
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A global minimum tax will be introduced for multinational companies, generating an extra HK$15 billion in annual revenue.