The government of the Hong Kong Special Administrative Region is taking firm measures to rein in its budget deficit, which is expected to reach HK$49 billion (US$6.28 billion) or 4 per cent of its GDP in fiscal 2003/04.
But there may not be any need to increase taxes because of the strong recovery of the economy, which generates increased public revenues.
Hong Kong's economy is forecast to register a 6 per cent GDP growth this year, as compared with 3.3 per cent in 2003. Riding on a GDP growth of 3.8 per cent over the medium term, the government aims to eradicate the fiscal deficit and even generate a slight surplus of HK$6 billion by 2008/09.
"In this year's budget, I propose no further increases in salaries tax, profits tax or any other tax," Financial Secretary Henry Tang said.
