Airport tax to rise, $2 concession fare for elderly to be curbed under new Budget

 

Paul Chan unveils the Budget at the Legislative Council

Plane fares from Hong Kong are set to rise by $80 starting in April this year, as part of the belt-tightening measures announced by Hong Kong Financial Secretary Paul Chan today, Jan. 26.

The air passenger departure tax will go up from $120 to $200 from the third quarter of the year, an increase that Chan said would have “minimal” effect on passengers.

However, a whopping $1.6 billion is expected to be generated from this measure.

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Chan also said he is eyeing a $200 levy for each car that departs land borders, which could add $1 billion to the government coffers each year.

Increasing annual licence fees for electric vehicles, parking meter charges, as well as fixed penalty tickets for traffic violators are also, in the offing.

Another cost-cutting measure would impact elderly residents, who comprise 23% of the city’s population. From April, the flat fare of $2 paid by those aged 65 and above when traveling on most public transportation will apply only if it their ticket price is $10 or below. If higher, they will only get an 80% discount on the fare.

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There will also be a cap of 240 rides per month (or roughly, about 8 per day) for their discounted fare.

In a rare move, the government also announced no salary increase for all civil servants for the next fiscal year.

In addition, about 10,000 people on government payroll will be let go to further trim expenditures.

But there were also surprise sweeteners in the budget, like the 100% reduction in salaries tax as well as profits tax. However, the caps set for these benefits are whittled down by half, or $1,500 instead of the previous $3,000.

Chan said these concessions will reduce government revenue by $3.1 billion, but will benefit 2.1 million taxpayers and 165,000 businesses.

Social security payouts will remain unchanged from last year, with an additional half-month payment of regular allowances for those receiving Comprehensive Social Security Assistance, Old Age and Disability Allowance, and Working Family Allowance.

There was also good news for those who plan to buy property. The stamp duty of $100 will be collected only if the maximum value of the property exceeds $4 million, instead of the $3 million set last year.

Overall, this year’s concessions amount to $8.3 billion in total, down from last years $11.5 billion.

At a public forum held after his Budget speech, Chan asked for public understanding amid criticism that the middle class would be affected the most by the revenue cuts.

He said the government needed to effect measures to boost revenue and retain Hong Kong’s competitiveness, while doing everything possible to lessen the impact of the new measures on the public.

For the full Budget speech and related stories, please click this link: https://www.info.gov.hk/gia/general/202502/26.htm

 

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