PricewaterhouseCoopers: Retrenchment is a cautious response by the Hong Kong government to recent market changes and expectations.

On February 28th, Li Shangyi, Managing Partner of Tax Services at PwC China, stated that the Financial Secretary has taken a cautious approach to tax policies. He suggested raising the standard tax rate for high-income taxpayers, reducing tax incentives for electric private cars, and reinstating the hotel room tax. At the same time, he also proposed strengthening certain tax deductions under the profits tax, abolishing all stamp duty measures related to residential property demand management, and continuing to provide specific relief measures. The Budget also mentioned that various new tax measures announced in last year's Financial Budget have further progressed towards implementation, including mechanisms for overseas companies to migrate to Hong Kong, patent box tax incentives, and optimizing existing tax systems related to investment funds, family offices, and associated entities. Li Shangyi pointed out that Hong Kong faces talent and skills shortages in multiple industries and sectors. PwC is pleased that the government not only reviews existing talent attraction schemes to ensure their effectiveness but also continues to implement specialized training programs for specific industries to enhance the local talent pool. Regarding the comprehensive removal of the hot stamp duty, Li Shangyi believes it is a cautious response to the latest market changes and expectations, reducing uncertainty surrounding this measure and allowing the market to reflect genuine demand.