Joint Submission on 2014-2015 Budget by the Hon Charles Mok and the Hon Kenneth Leung
Enhancing solid waste management and supporting the green industry 1.
Set up a 20-billion “Waste Recycling Industry Fund” to promote and enhance local recycling industries strategically. The Fund will be used to establish a comprehensive outreaching network for collection of solid waste, and further develop the recycling industry. The Government can consider making use of this Fund to provide interest free loans to eligible local recycling business. In addition, the fund can be used in a form of “seed funding” to invest in quality local recycling business in an early phase.
2.
A super tax deduction of 150% should be granted to taxpayers who acquire eligible environmental protection facilities or plant or machinery.
3.
Increase the financial resource of the Waste Reduction and Recycling Scheme component of the Environment and Conservation Fund, to reinforce the public education on waste reduction, sorting and recycling.
4.
To provide a 50% reduction in the profits tax rate for qualified recycling industry.
Supporting the small and medium sized enterprises and promoting research and development activities 5.
To introduce a two-tiered profits tax rate structure with a reduced rate of 10% for companies with (i) annual turnover below HK$25 million; and (ii) net assessable profits below HK$2 million. Anti-avoidance legislation must be built in to avoid SMEs making use of group companies to split the business to benefit from the small companies rate.
Joint Submission on 2014-2015 Budget by the Hon Charles Mok and the Hon Kenneth Leung
To waive the business registration fees for 2014/15 for all businesses. 6. 7.
To allow a 150% super tax deduction for research and development costs incurred by taxpayers in Hong Kong for profits tax purposes. To inject $300 million to the Innovation and Technology Commission in 2014-15 to re-establish the ‘Applied Research Fund’ and invest in commercially viable projects with scaling potential. The fund should be managed by professional asset managers with experience and strong business acumen, with a view of attracting local and global technology start-up entrepreneurs.
Tax incentives for individual 8.
To expand each of the tax bands from $40,000 to $60,000 without altering the current level of personal allowance.
9.
To increase the dependent parents/ grandparents allowances. We consider it appropriate to increase the dependent parents/ grandparents allowance for taxpayers living together with their parents /grandparents. The allowance shall be increased from $38,000 to $50,000 for the dependent parents / grandparents who are aged 55 to 59 and from $76,000 to $100,000 for dependent parents / grandparents who are aged above 60. (the corresponding allowance shall be reduced by half in respect of the taxpayer who is not living together with their parents / grandparents).
10. To allow married couples to elect for personal assessment separately so as to reflect the fact that an individual is a separate taxing person and in line with the trend of financial independence and privy of financial information between spouses. 11. To allow tax deduction for insurance premium paid for Health Protection Scheme and other private medical insurance schemes of up to $50,000 a year. 12. To allow tax deduction for employees’ voluntary contribution to the MPF scheme of up to $50,000 a year. 2
Joint Submission on 2014-2015 Budget by the Hon Charles Mok and the Hon Kenneth Leung
13. According to the data of Census and Statistics Department in 2012, Hong Kong has the lowest total fertility rate in the world of only 1,253 children that would be born alive to 1,000 women during their lifetime. As outlined in the consultation document on population policy, we suggest increasing child allowance from $70,000 to $120,000 per year of assessment. Although a change in tax policy alone is definitely not enough to reverse this fertility trend, but this is a positive message that the Government is determined to pursue a more rigorous policy to boost the fertility trend. Broadening our tax base 14. The Government should continue to carry out studies and explore ways to broaden Hong Kong’s tax base and reduce our fiscal volatility in order to maintain a healthy and sustainable fiscal system. A broadened tax base with new stable sources of income will allow the Government to reduce its fiscal reserve balance and to be less reliant on the non-recurrent part of the fiscal revenue - namely the land premium. It has been alleged that the Government has been maintaining a high land price policy in order to maintain the level of non-recurring income - the source of the woes of the high property price. 15. As a measure to broaden the tax base, the Government should study the introduction of tourism tax to visitors and/ or consumption tax on luxury goods. The introduction of these taxes would hopefully change the visiting pattern of the tourists. We would like to maintain the level of income from the tourism industry but less number of tourists visiting Hong Kong so that there will be more public space and amenities for the Hong Kong people. Income will be used in supporting cultural related economy and preserving the local culture. Promoting ICT Industry Development
16. From 2014-15, earmark $100 million to establish a five-year ‘SME Technology Adoption Fund’ which will provide resources to local SMEs for implementing projects that enhance operation efficiency, business transformation and strengthen cyber security using information 3
Joint Submission on 2014-2015 Budget by the Hon Charles Mok and the Hon Kenneth Leung
and communication technology, for example to comply with ISO20000 IT service management and ISO27001 information security management standards, to enhance their overall competitiveness. (Suggested maximum amount of funding support for each approved project is $100,000 or 50% of the approved project expenditure, whichever is the less, project duration within two years) 17. From 2014-15, inject $50 million to the OGCIO for the establishment of a three-year ‘International ICT Awards Incentive Scheme’ to encourage local enterprises to enter recognized international ICT awards, and provide additional incentive and publicity for awardees from recent 3 years and after to promote and recognize local innovation and technology development (Suggested maximum funding amount for each awarded company: $100,000) Enhancing Technology Education and Nurturing Talents
18. To earmark $200 million in 2014-15 to establishing a ‘Technology Education Development Fund’, through which engineering, ICT, computer science and related faculties/departments of UGC-funded institutes can apply for funding to enhance curriculum of related programmes (e.g. develop course contents that matches the needs of the ICT industry, enrich students’ learning experience and launching more courses on future technology trends), to improve teaching and learning standards on innovative technologies and support diversification of Hong Kong’s economy and nurture talents for emerging industries. (Suggested maximum amount of funding support for each approved project is $1.5 million or 90% of the approved project expenditure, whichever is the less) 19. To earmark $30 million in 2014-15 to the OGCIO for launching a new ‘ICT Ambassador Program’ to recruit 50 secondary school students with potential and passion in technology and innovation to participate each year. Participants will join local workshops aim at acquainting them with prospects in ICT development, R&D, entrepreneurship, be paired with a mentor from local industries. Outstanding students will have internship opportunity at international ICT firms, overseas universities or R&D organisations and share their experience upon return, to inspire 4
Joint Submission on 2014-2015 Budget by the Hon Charles Mok and the Hon Kenneth Leung
our youth to pursue technology and innovation as a career. 20. To earmark $400 million in 2014-15 and 2016-17 to increase the annual grant level of the Composite Information Technology Grant (CITG) to provide resources to schools for improving network infrastructure, equipment, computer hardware/software and technician support, to improve readiness for implementing eLearning territory-wide. 21. To earmark $300 million each ear in 2014-15 to 2016-17 to establish ‘Mobile Learning Subsidy’ to subsidize approximately 370,000 students from low-income families to purchase tablet or laptop computers for education purpose, in order to achieve ‘one child one computer’ and narrow the digital divide; 22. From 2014-15, to raise the subsidy level for Continuous Education Fund (CEF) to $20,000 per person, earmark 150 million to the SFAA, and broaden the sector of reimbursable courses to cover ‘Information and Communication Technology’ and encourage course providers to provide related courses that maintain competitiveness of local talent in technology as recommended in the ‘2014 Digital 21 Strategy’, such as application of the Internet of Things, cloud computing and Building Information Modelling. -END-
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