Fireworks explode over Victoria Harbour to celebrate the New Year in Hong Kong on Jan 1, 2024. (PHOTO / AFP)

The business sector in Hong Kong has urged the government of the Hong Kong Special Administrative Region not to levy new taxes and has recommended that the government abandon its property market tightening measures and consider various ways to reinforce Hong Kong’s status as an international financial center.

Representatives of the Business and Professionals Alliance for Hong Kong (BPA), including its chairman Lo Wai-kwok and vice-chairman Jeffery Lam Kin-fung, submitted the party’s recommendations on Thursday to Financial Secretary Paul Chan Mo-po for consideration in the Budget 2024-25.

The Federation of Hong Kong Industries — the business chamber representing the industry sector in the city — said that the administration should mull more measures to reinforce its status as an international financial center

Lo, who is also a Legislative Council member representing the Engineering functional constituency, said that the administration should further reduce the stock stamp duty rate to 0.05 percent, and simplify the listing rules.

READ MORE: HK starts market consultation on global minimum tax 

Briefing the media on Thursday, Lo expressed his disapproval of tax increases, saying that “when it is still a difficult economic period, tax increases will add to the burden on the public”. 

There have been market suggestions that the administration should levy a departure tax on residents and capital gains tax to replenish government revenues, which are currently being squeezed by a weak economy and a faltering equities and property market.

Lam, a lawmaker representing the Commercial functional constituency, stressed that the government should not raise taxes. 

“The simple and low tax system is Hong Kong's advantage. Once taxes are increased, it will harm the economy and the gains will (be) outweighed by the losses. Especially once a departure tax is levied, it will hinder exchanges between Hong Kong and the Chinese mainland, which is not worth it,” Lam argued.

He also said that he hopes the one-visa multiple-travel arrangement will be restored as soon as possible and expanded to other cities in the Guangdong-Hong Kong-Macao Greater Bay Area. He added that the travel arrangement should be expanded to more mainland cities and duty-free limit for mainland visitors to Hong Kong should be increased to HK$100,000 ($12,820) 

The Federation of Hong Kong Industries — the business chamber representing the industry sector in the city — said that the administration should mull more measures to reinforce its status as an international financial center.

READ MORE: Government slashes stamp duty on property

“We strongly believe that the forthcoming budget should prioritize continuing to provide support and relief measures for small and medium enterprises (SMEs) under the still-challenging circumstances, while reinforcing Hong Kong's continuous status as an international financial center, injecting renewed vigor into our economy,” FHKI Chairman Steve Chuang said in the business chamber's statement on Thursday.

The FHKI recommends reviewing stamp duty and profits tax, lowering the listing threshold for the Growth Enterprise Market, and proposing various measures to revive the stock market trading volume to ensure that the city’s financial market continues to provide effective financing channels for SMEs and startups.

With the continuous decline in Hong Kong's export volume, the FHKI suggested that the government should give priority to improving cash flows for SMEs and enhancing export credit insurance measures to assist the business sector in navigating its way through the uncertain economic times.