Lam proposes lowering taxes for SMEs
CGCC praises former CS for her long experience and no-nonsense style
Chief Executive aspirant Carrie Lam Cheng Yuet-ngor said on Wednesday she is “actively considering” lowering profits tax rate for the city’s small- and medium-sized enterprises (SMEs) to “drive their future development”
Meeting senior bankers from the financial industry at a seminar, Lam proposed a two-tier profits tax rate system. This would maintain the current 16.5 percent rate while offering a lower rate to SMEs which are less profitable.
The proposal will be included in her election manifesto scheduled to be released in early March, she said.
Lam said the idea came after she talked with members of the business community. They want the next government to review its taxation policies. She said she was willing to cut taxation if it would bring greater economic benefits.
According to the Trade and Industry Department, Hong Kong currently has over 320,000 SMEs. They constitute over 98 percent of the city’s business establishments and employ over 46 percent of the total workforce in the private sector
am also pledged to enhance Hong Kong’s financial sector by expanding the government’s role from a supervisor to “a facilitator and a promoter”.
“A facilitator means a government in which intra-departmental cooperation is frequent and efficient,” Lam said. “A promoter implies a government of action — sparing no efforts in striving for opportunities for industry”.
Most representatives were concerned about how Hong Kong can capitalize on the nation’s Belt and Road Initiative. Lam said Hong Kong, as one of the world’s key financial centers and with a great pool of talented people, would have ample opportunities. This was because a great number of infrastructure projects need financing and pro- fessional services.
She also eased concerns about her ability to handle financial issues. She chaired the city’s International Business Committee, which comprises representatives from 27 foreign chambers of commerce in Hong Kong and the Hong Kong General Chamber of Commerce.
Lam also hired former chief executive of the Hong Kong Monetary Authority Joseph Yam Chikwong as her senior adviser.
At the same occasion, another two Chief Executive hopefuls — Regina Ip Lau Suk-yee and John Tsang Chun-wah — also stated that tax policy reform would be a focus of their economic development strategy.
Organizing the seminar was the Chi Tung Association — a local business association formed by senior bankers. Around 40 members took their seats in the Election Committee — Hong Kong’s electoral college to choose the city’s head of government, according to the association’s chairman Ng Lin-fung.
The Chinese General Chamber of Commerce (CGCC), which holds 18 votes in the Election Committee that chooses the Chief Executive, will nominate and vote for Carrie Lam Cheng Yuetngor in the election, calling her the best candidate.
The CGCC made the decision after separate meetings between three CE contenders — Carrie Lam, Regina Ip Lau Suk-yee and John Tsang Chun-wah — and the chamber’s committee members and Election Committee members before the Chinese New Year.
Another CE aspirant, Woo Kwok-hing, did not have time to meet them.
CGCC President Jonathan Choi Koon-shum told China Daily on Wednesday: “Tens of CGCC committee members and Election Committee members were very eager to meet Carrie Lam.
“The meeting was originally to last one hour but it was extended to one and half. This is because our members were very enthusiastic about exchanging views with her and asking questions.”
Choi said the members appreciated her long experience in civil service and no-nonsense style. Lam is also very capable and committed, and has the right attitude to serve Hong Kong, he added.
She also had a high popularity rating, although this has fallen because she handled some controversial issues such as electoral reform, Choi said.
Many people perceive economic affairs as Lam’s weakest link, arguing she was more focused on social welfare when in government.
“I talked to her. I said if she becomes CE, she needs to do more on economic development. If economic development stagnates, there will be no tax income to improve people’s livelihoods and no jobs for people,” Choi said.
Lam said she is no novice on economic issues, Choi revealed.
Choi cited an example: Over the past few years, the CGCC has organized visits to Southeast Asian countries with a view to signing regional trade agreements. Lam joined them as a guest of honor while she was chief secretary for administration (CS). She visited Malaysia, Singapore and Vietnam and attended economic forums on Hong Kong’s role in ASEAN and Belt and Road countries and regions.
“So after we eased doubts
After we eased doubts about her (Carrie Lam’s) economic knowledge, we decided to support her. As the CGCC is very united, we will bundle our votes to nominate and vote for her.” Jonathan Choi Koon-shum, president of the Chinese General Chamber of Commerce
about her economic knowledge, we decided to support her. As the CGCC is very united, we will bundle our votes to nominate and vote for her — unlike some people who nominate one person but vote for another,” he said.
Choi stressed that they made the decision to support Lam before Chinese New Year, without the influence of other people.
Choi, who attended Lam’s campaign rally on Feb 3, was quite impressed. However, he said too much emphasis was put on social welfare and she talked very little about the economy.
“She should mention more about the economy and our trips to ASEAN countries,” he suggested. “Perhaps she was afraid of allegations of government-business collusion.
“But instead of being close with individual companies, she can get closer with business chambers.”
Discussing Regina Ip and John Tsang, Choi said they were also competent people. However, he is unsure whether Election Committee members and Hong Kong people like Ip’s image and style. Tsang, as financial secretary, was very conservative and wrong about surplus estimates year after year.
In his election platform, Tsang proposed a progressive profits tax and negative income tax.
Choi would not elaborate on the progressive profits tax until there are concrete details. He believes a negative income tax will complicate Hong Kong’s low tax regime.
He said: “He can give more welfare to the underprivileged, but why touch the tax system? If that can be done, he should have done it much earlier as financial secretary.”