The Financial Secretary, Mr. John Tsang, delivered the 2016-17 Budget Speech at the Legislative Council on 24 February 2016.
In this Tax Flash, we set out a summary of the following:-
- Economic Performance and Outlook
- Financial Highlights
- Relief and Measures
- Strategy on Developing Economy, Enhancing Competitiveness and Supporting Enterprises
- Our Commentary
1. Economic Performance and Outlook
- GDP grew by 2.4% in real terms and GDP per capita became HK$328,900 in 2015. GDP growth rate is forecasted to be 1 – 2% in 2016. GDP per capita is forecasted to be HK$334,500 – HK$337,800 in 2016.
- Unemployment rate was 3.3% in 2015.
- The underlying average inflation rate was 2.5% in 2015. The underlying inflation rate is forecasted to be 2% in 2016.
- Hong Kong is the world's largest offshore RMB business hub, with the world's largest pool of RMB liquidity.
- Hong Kong ranked first globally in terms of funds raised through initial public offerings, which amounted to HK$260 billion in 2015.
2. Financial Highlights
- A surplus of HK$48.3 billion in the Operating Account and a surplus of HK$30.5 billion in the Consolidated Account are forecasted for the year ending 31 March 2016. By 31 March 2016, the Hong Kong's fiscal reserves will be increased to HK$859.0 billion.
- A surplus of HK$21.4 billion in the Operating Account and a surplus of HK$11.4 billion in the Consolidated Account are forecasted for the fiscal year 2016/17. By 31 March 2017, fiscal reserves are expected to reach HK$870.4 billion. Breakdowns of 2016/17 estimated total government revenue and total government expenditure are as follows:-
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