Hong Kong Financial Secretary Paul Chan Mo-po said on Wednesday that for 2016-17, he forecast a surplus of 92.8 billion HK dollars (about 11.9 billion U.S. dollars) and expected fiscal reserves to reach 935.7 billion HK dollars by 31 March, 2017.
Delivering the 2017-18 Budget, Chan said the 2016-17 revised estimate on government revenue is 559.5 billion HK dollars, 12 percent higher than the original estimate, which is due mainly to the increase in revenue from land sales and stamp duty.
Revenue from land sales is 50.8 billion HK dollars, or 76 percent higher than the original estimate, demonstrating yet again that land revenue has always been highly volatile and vulnerable to market fluctuations, Chan said.
"It was only in 2015-16, when revenue from land sales was nearly 9.1 billion HK dollars lower than estimated as some sites were unable to be sold. As a result of a period of hectic trading in the property market last year, stamp duty revenue for the whole year would be 8 billion HK dollars or 16 percent higher than estimated," he added.
As for government expenditure, the financial secretary forecast a revised estimate of 466.7 billion HK dollars, 4.1 percent or 20.2 billion HK dollars lower than the original estimate.
In view of the current fiscal situation, Chan proposed a series of measures to share the fruits of our economic development with members of the public. They include reducing salaries tax and tax under personal assessment for 2016-17 by 75 percent, which will reduce government revenue by 16.4 billion HK dollars, widening the marginal bands for salaries tax from the current 40,000 to 45,000 HK dollars, which will reduce tax revenue by 1.5 billion HK dollars a year.
