In the 2023-24 Budget, the Financial Secretary proposed a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2022/23 by 100 per cent, subject to a ceiling of $6,000 per case.

The proposed tax reduction will only be applicable to the final tax for the year of assessment 2022/23, but not to the provisional tax of the same year. Therefore, taxpayers are still required to pay the provisional tax on time as stipulated in the demand notes that have been issued to them. The provisional tax paid will, in accordance with the Inland Revenue Ordinance, be applied in payment of the final tax for the year of assessment 2022/23 and provisional tax for the year of assessment 2023/24. The excess balance, if any, will be refunded.

The proposed tax reduction is not applicable to property tax. Nevertheless, individuals with rental income, if eligible for personal assessment, may be able to enjoy such a reduction under personal assessment.

In addition to the one-off tax reduction, the Financial Secretary proposed to increase child allowance effective from the year of assessment 2023/24. The basic child allowance for each child and the additional child allowance for each child born during the year of assessment will both increase from the current $120,000 to $130,000.

On profits tax, the Financial Secretary proposed to provide tax deduction for the spectrum utilisation fees to be paid by the future successful bidders of radio spectrum. Besides, he proposed to increase the tax deduction for the Mandatory Provident Fund voluntary contributions made by employers for their employees aged 65 or above from the current 100 per cent to 200 per cent.

These measures will be implemented upon completion of the relevant legislative procedures.

In respect of stamp duty, the Financial Secretary proposed to adjust the value bands on which the ad valorem stamp duty at Scale 2 rates apply. The new value bands will be applicable to any conveyance on sale or agreement for sale of residential or non-residential property transaction that is subject to the ad valorem stamp duty at Scale 2 rates.