Hong Kong tax revenue falls by HK$18.2 billion to HK$342 billion amid weak stock and property markets, but rebound forecast next year
- Tax commissioner says revenue is likely to rise by 12 per cent in 2024-25, after city scrapped property market curbs this year
- Stamp duty takings for last financial year drop 30 per cent, after falling by same amount in 2022-23
Hong Kong’s tax revenue fell by HK$18.2 billion (US$2.3 billion) to HK$342 billion in the last financial year amid a slump in the stock and property markets, but authorities have said income is set to rebound as curbs on buying flats have been scrapped.
Commissioner of Inland Revenue Tam Tai-pang said on Thursday he expected tax revenue to rise by 12 per cent in the 2024-25 financial year because of factors such as the property market cooling measures being lifted earlier this year, as well as growth in salaries and gross domestic product.
Provisional figures released by the Inland Revenue Department showed income from stamp duty collection in 2023-24 dropped by 30 per cent against the year before, from HK$70 billion to HK$49.1 billion.
“The property market and stock market last year were not very promising and not satisfactory. As a result, the stamp duty collections have greatly decreased,” commissioner Tam said.
But he pointed to a “notable increase in property transactions” following “the abolition of all demand-side management measures for residential properties”.
“We see this from the number of registrations in the Land Registry. We also see this from applications for stamping requests to the Stamp Office.”
The recent stock market sentiment was also “quite positive”, he said.
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Authorities scrapped all property market cooling measures on February 28 as part of efforts to help restore the city’s declining fiscal health and in response to appeals from the business community.
Takings from profits tax, which accounted for half of the total revenue in the last financial year, also decreased by 2 per cent to HK$170.5 billion against the HK$174.2 billion recorded the year before.
But government income from salaries tax, representing 23 per cent of the total revenue, increased by 0.5 per cent from HK$79.5 billion in 2022-23 to HK$79.9 billion in the last financial year.
The government estimated total tax revenue would increase to HK$382.8 billion in 2024-25, which included HK$71 billion in stamp duty and HK$279.6 billion in total earnings and profits tax.
Last year, the city also recorded a decline of HK$18.3 billion in tax revenue for 2022-23, as well as a 30 per cent plunge in stamp duty payments.
