Hong Kong Budget 2024: Higher salaries tax rate for those earning over HK$5 million annually
Hong Kong Free Press
The Hong Kong government has announced the introduction of a tiered salaries tax regime from the 2024-25, which will see earners whose annual net income exceeds HK$5 million pay more.
The financial secretary Paul Chan announced on Wednesday that taxpayers whose net income exceeds HK$5 million will be subject to an increased tax rate of 16 per cent on earnings over HK$5 million. Their first HK$5 million will be charged the standard rate of 15 per cent.
Chan said the new regime would affect 12,000 taxpayers, or just 0.6 per cent, and predicted that the move would raise HK$910 million per year for the government.
“Even with the two-tiered standard rates regime above in place, the new tax rates will still be lower than those of other advanced economies, ” Chan said in Cantonese when he delivered the budget address for the 2024-25 fiscal year.
Currently, salaries tax in Hong Kong is calculated at progressive rates from 2 per cent to 17 per cent on taxpayers net chargeable income or at a standard rate of 15 per cent on net income, whichever is lower. The standard rate is normally adopted for high earners.
Chan previously said in a blog in early January that authorities should take appropriate measures to increase revenue but also need to take the actual circumstances and current development into account.
“We need to maintain the advantages of our simple and low tax regime and bear in mind the burden on our residents,” Chan said.
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