The Chief Executive, Mrs Carrie Lam, delivers the Policy Address on October 11, 2017
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In her maiden Policy Address, Hong Kong Chief Executive Carrie Lam outlined plans to maintain the city’s competitiveness, diversify the economy and address livelihood issues.
Mrs. Lam unveiled new tax measures to reduce the burden on companies, including introducing a two-tiered profits tax system that would lower the profits tax rate to 8.25 percent – half the current standard rate – on the first US$256,000. Earnings after that would be taxed at the current 16.5 percent rate.
Emphasizing the need to diversify Hong Kong industries, Mrs. Lam said that the innovation and technology industries were ripe for further development. She announced that the government would set a goal to double the gross domestic expenditure on research and development (R&D) as a percentage of gross domestic product from 0.73 percent to 1.5 percent by the end of the current government’s five-year term of office. Other initiatives include:
- Setting aside no less than US$1.3 billion as university research funding;
- The Innovation and Technology Bureau kick-starting a US$64 million technology talent initiative; and
- The government proposing that the first US$256,000 in eligible R&D expenditure enjoy a 300 percent tax deduction and 200 percent for the remainder. The proposed measure aims to reverse the ratio of public sector versus private sector expenditure on R&D from government-led to public-private participation which would make R&D funding more sustainable.
She announced that the government would invest US$90 million for smart city infrastructure projects, including an eID, a single digital identity allowing individuals to conduct government and commercial transactions online.
Mrs. Lam said Hong Kong’s creative industries were a powerhouse that would drive the economy, add value and make Hong Kong a more attractive international city. The government would inject US$128 million into the Create Smart Initiative to strengthen support for the development of the design industry and the creative industries.
On Hong Kong’s land supply, the government would continue to increase the supply of land to meet the various needs arising from economic development.
Mrs. Lam said that Hong Kong would capitalize on the opportunities presented by Mainland China’s Belt and Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development.
The government would explore the establishment of an information sharing platform for Belt and Road projects so that enterprises would have a better grasp of relevant information to facilitate more effective project interfacing and enterprise collaboration. Regarding the Bay Area development, the government would seek further measures to facilitate the flow of people, goods, capital and information thereby creating a quality living circle for Hong Kong people.
As for the environment, the government announced that an air quality review would be completed next year. Beginning in 2019, the government plans to mandate that vessels in Hong Kong waters use low sulphur fuel.
2017 Policy Address
“The Best is Yet to Come” Video
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