Submission on the 2010-2011 Budget

1. Offer personal tax allowance for insurance premium. I have repetitively urged the Chief Executive and the Financial Secretary to consider offering personal tax allowance for insurance premium payment up to HK$20,000 as an incentive to taxpayers in preparation for their future living and medical expenses after retirement. If people were transferring these liabilities to insurers, they would be less reliant on the Government in case of contingency. In light of the strong call for such incentive in society, I ask the Government to introduce such allowance in the Budget of 2010/11.

2. Accept non-investment linked life insurance products as approved investment under the “Capital Investment Entrant Scheme”. The Government has earlier accepted investment linked insurance products as approved investment under the Scheme. In view of the increasingly strong demand for non-investment linked products in the market as well, I ask the Government to put them on the list of approved investments.

3. Encourage multinational corporations to set up regional offices in Hong Kong. I ask the Government to introduce more aggressive tax or financial concessions to attract foreign investors to Hong Kong. The Government might consider signing formal agreements with investors that stipulate specific undertakings in amount, timeframe and new jobs creation as mutual covenants. Financial concessions would be granted upon fulfillment of milestone undertakings.

4. Extend tax holiday for home mortgage interest. To most middle-class families, mortgage repayment is their single largest monthly expenditure. Therefore, the tax holiday for mortgage interest up to 10 years introduced in the Fiscal Year 1998/99 has been most helpful as a relief. As original entitlements of many taxpayers are expiring in coming years, I ask the Government to extend the tax holiday beyond 10 years.

5. Raise personal tax allowances duly. Although Hong Kong is recovering from the global financial tsunami, unemployment has remained high. People are still laden with considerable pressure in work and livelihood. Financial burden of the middle class is particularly high, and the Government should raise various personal tax allowances duly in relief. I ask the Government to raise the allowance for dependent child from HK$50,000 to HK$100,000 and allowance for dependent parents or grandparents from HK$30,000 to HK$60,000. Moreover, the Government should continue to provide financial relief to households through concessions in rates and utilities charges etc.

6. Extend coverage of cross-district transport subsidy to all districts. By official statistics, workers earning less than HK$4,000 have been increasing since the reunification. This figure has risen from around 220,000 in 1997 to almost 400,000 recently. The Government should offer more support and relief to those “working poor” that are not seeking Comprehensive Social Security Assistance (CSSA). I ask the Government to extend coverage of cross-district transport subsidy to all districts in Hong Kong as an incentive for taking up cross-district employment.

7. Attend to needs of the sanwu people. The “sanwu” or “Three Non’s” are people who are non-CSSA recipients, non-homeowners and non-taxpayers. I ask the Government to provide more relief measures (like accelerating the queue for public housing) to them in support, particularly the lowest income group.

December 2009

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