Hong Kong Government Announce Grants for Companies Struggling to Cope with COVID-19
The Hong Kong government has announced a 100% cut in profits tax for 2019 (subject to a HKD $21,000 ceiling) in order to help local businesses which have been struggling due to a combination of factors, mainly the issues are global and widespread, however all fairly close to home for Hong Kong:
• An extension of the China-US trade row.
• Anti-government protests.
• The coronavirus outbreaks.
Financial Secretary Paul Chan said the tax relief will reduce the government's revenue by HKD $2 billion. Chan said Hong Kong’s economy is expected to contract by between 0.5 and 1.5% this financial year, citing reasons of facing enormous challenges.
At the Legislative Council in his budget speech the Financial Secretary warned that “the outlook is far from promising in the mid to short term”. He also cited upcoming government plans to waive business registration fees for the coming year, and how they are in the process of setting up low-interest loans for small and medium-sized businesses to help them through the economic slump.
Under the proposed arrangement, the Hong Kong government will offer an 100% guarantee and the maximum loan amount that a company can take out will be a blanket set amount of HKD $2 million.