On 22 February 2023, the Financial Secretary delivered the budget speech for 2023-24 proposing the following tax measures.

The Secretary proposed a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2022/23 by 100 percent, subject to a ceiling of $6,000 per case. The tax reduction will reduce the amount of tax payable by taxpayers for the year of assessment 2022/23. Taxpayers should file their profits tax returns and tax returns for individuals for the year of assessment 2022/23 as usual. Upon enactment of the relevant legislation, the Inland Revenue Department will effect the reduction in the final assessment.

The proposed tax reduction will only be applicable to the final tax for the year of assessment 2022/23, but not to the provisional tax of the same year. Therefore, taxpayers are still required to pay the provisional tax on time as stipulated in the demand notes that have been issued to them. The provisional tax paid will, in accordance with the Inland Revenue Ordinance, be applied in payment of the final tax for the year of assessment 2022/23 and provisional tax for the year of assessment 2023/24. The excess balance, if any, will be refunded. The proposed tax reduction is not applicable to property tax.
A taxpayer who is separately chargeable to salaries tax and profits tax can enjoy a tax reduction under each of the tax types. For a taxpayer having business profits or rental income and electing for personal assessment, the reduction will be based on the tax payable under personal assessment. It might be different from the amount of tax reduction he or she would get if he or she was not assessed under personal assessment. The exact amount will need to be evaluated case by case. Individuals having business profits or rental income may elect for personal assessment in their tax returns for the year of assessment 2022/23. On profits tax, the Financial Secretary proposed to provide tax deduction for the spectrum utilisation fees to be paid by the future successful bidders of radio spectrum. Besides, he proposed to increase the tax deduction for the Mandatory Provident Fund voluntary contributions made by employers for their employees aged 65 or above from the current 100 percent to 200 percent.

The above measures will be implemented upon completion of the relevant legislative procedures.