ACCA: It is expected that Hong Kong's comprehensive surplus for the year 2025/26 will reach HK$4.1 billion, with 15 proposals including providing tax incentives for enterprises in the Northern District.

The Hong Kong government will announce the financial budget for the fiscal year 2026/27 on February 25. The Hong Kong branch of the Association of Chartered Certified Accountants (ACCA) has submitted a new set of budget proposals covering 15 recommendations, including accelerating the development of the Northern Metropolis Area, strengthening Hong Kong as a platform for Mainland enterprises to "go global", and speeding up the development of innovative technology in Hong Kong. In addition, ACCA expects that Hong Kong's overall surplus for the fiscal year 2025/26 will reach HK$4.1 billion. ACCA Hong Kong branch chairman Albert Au Cheun expressed that in order to capitalize on the current development momentum and translate it into sustained high-quality growth, the strategic focus of the Hong Kong government for 2026 and beyond should be on implementing forward-looking fiscal and social policies to consolidate current achievements and actively safeguard Hong Kong's future competitiveness. ACCA stated that in order to ensure the long-term sustainability of Hong Kong's public finances, it is recommended to adopt a dual-track strategy with fiscal discipline and efficiency as the core. This includes practical spending control, enhancing the efficiency of public services, ensuring sustainable funding sources for new measures to maintain fiscal balance, and avoiding structural fiscal deficits; conducting a comprehensive review of all subsidy schemes and tax incentives, evaluating their effectiveness and policy impact carefully. The Association put forward 15 recommendations to the government. In terms of livelihood measures, it suggests increasing the cap for one-off tax reductions to HK$10,000; introducing a tax deduction cap of HK$30,000 for household helper expenses; raising the tax deduction cap for private medical insurance under voluntary medical insurance schemes to HK$16,000; and increasing the subsidy cap for continuous education funds to HK$40,000. The Association also proposed cooperation between the entertainment industry and the Kai Tak Sports Park to develop a year-round "concert economy." The Association believes that the Northern Metropolis Area is the new engine for Hong Kong's future development and recommends introducing three tax loss relief policies for enterprises setting up in the area, as well as providing tax incentives for capital expenditure by businesses in the area and introducing a tax refund system for eligible businesses. To consolidate Hong Kong's position as a leading platform for Mainland enterprises to "go global", the Association suggests that the government actively sign more bilateral tax agreements with countries along the "Belt and Road" and other major international economies, providing preferential tax rates and a unilateral tax relief system for jurisdictions without bilateral tax treaties to attract multinational companies to set up regional headquarters and service centers in Hong Kong. In terms of innovative technology development, the Association proposes expanding the deductibility of research and development expenses, clarifying and expanding tax deductions for intellectual property acquisitions, and more.