Should Hong Kong raise taxes and cut costs to rein in HK$100 billion deficit?

Hong Kong authorities have more than doubled their fiscal deficit estimate to HK$100 billion for the 2024-25 financial year, prompting calls to prioritize cutting expenses and potentially raising taxes due to weaker revenue from a soft property market. The structural reliance on land sales has been cited as a significant issue, with experts warning of the impact of slow economic growth on the current fiscal model. Finance chief Paul Chan Mo-po noted a slump in government revenue from land sales, stamp duty, and corporate taxes, emphasizing the need to consider cost-saving measures and resource reallocation before resorting to tax increases or external financing.

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