The centrepiece of Hong Kong's 2007 budget was a US$2.6 billion package of tax concessions which included cutting the city's salaries tax to a marginal maximum rate of 17% (with the payable rate capped at 16%). Financial Secretary, Henry Tang, also announced reductions in stamp duty on property transactions and one-off salaries tax rebates and rates waivers. Substantial reductions on wine and beer duty were also welcomed by the retail and hospitality sectors.
Mr Tang said the Government's fiscal position had markedly improved as a result of the strong economy, with GDP up 6.9% in 2006 and forecasts of 4.5% to 5.5% for the year ahead.
Budget surplus was also earmarked for major projects at the airport, for new sports facilities, for water and drainage services, to support the film industry, to install free WiFi internet access in many public areas and to build the new government complex.
Looking to the future, Mr Tang said the Government would continue to promote Hong Kong's financial services, would enhance trade and logistics competitiveness, and would continue the development of the city's tourism infrastructure.
To boost the business environment, the Government also highlighted continued measures to promote fair competition, nurture and attract talent, support scientific and technological research, and encourage innovation and creativity.