Pulling Tax Rabbits Out Of Budget Hats

As we head again into March, despite something of a sense of COVID-related deja-vu, there are definite green tax policy shoots apparent.

A good example of this is the recent delivery of Hong Kong's 2021-22 budget, in which the Government announced that it will waive up to HKD10,000 of profits tax, salaries tax, and tax under personal assessment, subject to a ceiling of HKD10,000 per case, and to certain provisos and conditions.

The Budget further also included a waiver of business registration fees for 2021-22 and an increase to the rate of ad valorem stamp duty from 0.1 percent to 0.13 percent of the consideration or value of each transaction of Hong Kong stock, payable by buyers and sellers.

South Africa has also delivered its Budget, containing few changes other than the main event, which is a reduction in the corporate tax rate from 28 percent to 27 percent for years of assessment beginning on or after April 1, 2022. The Government announced that the rate cut would be implemented "alongside a broadening of the corporate income tax base by limiting interest deductions and assessed losses."

Luxembourg, meanwhile, appears to be keen to keep its powder dry, with Finance Minister, Pierre Gramegna, ruling out tax hikes in the immediate future to recover the cost of the COVID-19 pandemic.

Interviewed by the English-language publication Delano, Gramegna explained that the government considers it is not yet time to discuss tax increases.

In the UK, meanwhile, any number of options may be on the table, and there's broad agreement among commentators of all political stripes that the Government will need to pull something pretty spectacular out of the bag in order to pull the UK economy from its current, locked-down, economic doldrums.

However, at the time of writing, Chancellor Rishi Sunak is still shuffling his Budget papers, lining up his stationery, and pouring himself a pre-Budget speech glass of water, so a fuller analysis of the UK Budget may need to wait.

(Until next week!)