Hong Kong: Government Releases Package of Measures to Support Workers and Businesses Affected by Coronavirus

Hong Kong: Government Releases Package of Measures to Support Workers and Businesses Affected by Coronavirus

The Hong Kong Special Administrative Region Government (HKSARG) has taken some remarkable steps to deal with the affects of the coronavirus pandemic, costing so far, a total of HK$287.5 billion.

Below we outline some of the key measures taken.

Job Retention - Employment Support Scheme

  • The Government will provide wage subsidies to eligible employers who undertake to have no layoffs or redundancies during the subsidy period, and to spend 100% of the subsidy on paying wages for their employees.
  • All employers who have been making Mandatory Provident Fund (MPF) contributions or have set up Occupation Retirement Schemes for employees are eligible (except the HKSARG, statutory bodies and subvented staff in Government funded organisations, etc).
  • Wage subsidies for each employer calculated on 50% of salary at a “specified month”, with a wage cap at a salary of HK$18,000 per month for six months. To be disbursed to employers in two tranches, with the first before end-June 2020.
  • Around 215,000 self-employed persons will receive a one-off lump sum subsidy of HK$7,500 if they have made MPF contributions in the past 15 months.
  • Around 800,000 persons in three sectors, i.e. construction, catering and road transport, who are not well covered by MPF, will be taken care of by the respective sector-specific schemes.

Support for Businesses

The second round of Anti-Epidemic Fund (AEF) measures have recently been announced to help the sectors worst affected, including the tourism, transport and catering industries through one-off grants and cash subsidies.

Tourism Industry

Subsidy to licensed travel agents ranging from HK$20,000 to HK$200,000; travel agents’ staff and active freelance tourist guides and tour escorts will each receive a monthly subsidy of HK$5,000 for six months; licensed hotels will receive a subsidy of HK$300,000 or HK$400,000 and tour coach drivers a one-off subsidy of HK$10,000.

Transport Industry

100% of the regular repair and maintenance costs and insurance premiums for six months will be reimbursed for franchised bus companies, franchised/licenced ferry operators and Tramways Limited. A one-off subsidy of HK30,000 (for each vehicle) will be provided to the registered owners of a taxi, red minibus, non-franchised bus, private school light bus and hire car, as well as the licence holders of green minibus services. Each eligible active taxi and red minibus driver will receive a monthly subsidy of HK$6,000 for six months.

Catering Industry

Licensed catering outlets selling or supplying food for consumption on their premises will receive a subsidy ranging from HK$250,000 to $2.2 million (paid in two tranches during a six-month period). Catering outlets receiving the subsidy are required to refrain from making staff redundancies during the subsidy period, and that no less than 80% of the subsidy for the respective months would be used for paying staff salaries.

Eased Cash Flow for Businesses

Under the SME Financing Guarantee Scheme, a special 100% concessionary low-interest loan is to be introduced for which the Government provides 100% guarantee. The “principal moratorium” will be extended from six months to one year, and the Government will increase its guarantee commitment from HK$20 billion to HK$50 billion.

Loans under the 80% and 90% guarantee products will enjoy an interest subsidy up to 3% and be open to application by listed companies, both valid for one year. The maximum loan amount for all loan guarantee products will also be raised.

Other measures to ease cash flow –

  • Reduce profits tax by 100% in Year of Assessment (YA) 2019-20, subject to a ceiling of HK$20,000.
  • Waive rates for non-domestic properties in 2020-21, subject to a ceiling of HK$5,000 per quarter in the first two quarters, and a ceiling of HK$1,500 per quarter in the remaining two quarters.
  • Waive business registration fees in 2020-21.
  • Increase the waiver amount of rental fees of venues under the Leisure and Cultural Services Department from 50% to 75% for the period from April 2020 to September 2020.

Relieving the Tax Burden for Individuals

  • Reduce salaries tax and tax under personal assessment for YA 2019-20 by 100%, subject to a ceiling of $20,000.
  • Deadline for payment of salaries tax, tax under personal assessment and profits tax for YA 2018-19 that are due in April to June this year automatically extended for three months.

For a more in-depth review of the measures, please click here.