In the world of budgets, Hong Kong and Singapore could not be more different, with Hong Kong announcing a new round of consumption vouchers for its citizens at HK$5,000 (S$854) per user, which is a significant drop from the previous round’s amount of HK$10,000 (S$1,707).
In contrast, Singapore’s Community Development Council (CDC) voucher is per household and offers a much smaller amount of S$300, but it reaches more households.
Hong Kong has announced a new Capital Investment Entrant Scheme to attract foreign talent, but investment in real estate will not be accepted. This is in contrast to Singapore, which continues to welcome foreigners who have been and are buying large amounts of property.
In terms of measures to alleviate the public’s financial burden, Hong Kong has reduced its salaries tax by 100 per cent, subject to a ceiling of HK$6,000 (US$765), which is much less than the HK$10,000 amount last year. The government will also provide rate concessions for residential properties, with the tax assessed discounted by HK$1,000 per quarter for each property.
Like last year, each eligible residential household will enjoy a subsidy of HK$1,000 on electricity. The government will also make exams free of cost for all candidates sitting the 2024 Diploma of Secondary Education.
First-time homebuyers who qualify for the new regime will end up paying a cheaper rate if they buy a flat valued at less than HK$9 million. Buyers will only be charged HK$100 rather than 1.5 per cent of the value of the flat if the property is priced between more than HK$2 million and HK$3 million. Only flats worth less than HK$2 million will be charged at the same rate as before.
In contrast, Singapore has increased property tax from 1 Jan 2023, affecting HDB flats, and 15% of all private residential properties and 60% of non-residential properties, as well as raising additional conveyance duties for buyers. For example, the changes are expected to increase by as much as 164.1%, in the property tax, for HDB 4-room flats from 2022 to 2024.
Hong Kong has also proposed an annual special football betting duty from 2023-24 to 2027-28, which the Hong Kong Jockey Club has stated will cost them an extra HK$12 billion in betting duty. Meanwhile, in Singapore, the 2.5 times charitable donation tax deduction will continue and the Tote board fund non-profit organisations like Business China headed by Members of Parliament from the People’s Action Party.
Lastly, Hong Kong will increase the number of eligible people covered by various elderly support schemes, while expanding the service coverage of existing centres. The Community Care Service Voucher for the Elderly scheme will be regularised in the third quarter of this year, and will increase the number of eligible people from 8,000 to 12,000 in 2025-26, at a cost of about HK$900 million.
Sixteen new neighbourhood elderly centres will be set up in the coming five years, and the service coverage of more than 200 district elderly community centres and neighbourhood elderly centres will be expanded in the fourth quarter of this year.
The number of eligible people covered by the Hospital Authority’s Integrated Discharge Support Programme for Elderly Patients will also be increased from 33,000 to 45,000 per year in the third quarter, with HK$74 million involved. From October, two financial help schemes for carers from low-income families will also be standardised, while the monthly allowance will be raised.
In contrast, Singapore has not announced any major changes to its elderly support programs in its latest budget.
While some may refer to Singapore’s handouts for the Goods & Service Tax (GST), it’s worth noting that Hong Kong does not have GST or value-added tax (VAT). Only specific items, such as liquor and tobacco, are subject to tax.
The GST voucher has historically been announced to be adequate to offset the GST increase for a few years for the general population, and typically for the lowest-income households for like ten years. We should note that the GST voucher is to offset the GST increase, and is not a “consumption” voucher.
