The Hong Kong Institute of Certified Public Accountants supports the new fiscal budget for the upcoming year, endorsing a prudent and forward-looking strategy to promote sound financial management and economic transformation

Regarding the Financial Secretary's announcement of the 2026-27 Budget today, the Hong Kong Institute of Certified Public Accountants expressed support, recognizing the government's prudent and forward-looking fiscal strategy in the context of current external uncertainties, fluctuating interest rates, asset market volatility, and the need to solidify local economic recovery. The budget maintains necessary support for livelihoods and the economy while focusing on enhancing the sustainability of public finances, aiming to rebuild market confidence and growth momentum. The overall direction aligns with the recommendations submitted by the Institute for the 2026-27 Budget. The Institute pointed out that Hong Kong is facing short-term fiscal pressures and structural challenges: rising recurrent expenditures, an aging population, urgent investment needs for major infrastructure and industrial transformation, while fiscal reserves have declined from their peak. Society requires a comprehensive solution that balances "prudent financial management" with "investing in the future." This budget proposes to steadily advance revenue enhancement and expenditure reduction while maintaining Hong Kong's competitiveness, which is believed to help clearly convey the government's determination to uphold fiscal discipline and improve governance effectiveness to the market. The Institute indicated that several orientations in the budget closely align with its recommendations, reflecting a consensus between the government and the industry on a "prudent and forward-looking fiscal strategy": (1) Prudent financial management and transparency: The Institute recommended that the government further enhance the clarity and comparability of public financial disclosures, strictly distinguish between "revenue" and "financing," and provide a clearer framework for the medium- to long-term fiscal path. The budget emphasizes fiscal discipline, controlling deficits, and medium- to long-term planning, which is consistent and helps consolidate the confidence of international investors and rating agencies. (2) Revenue enhancement without undermining competitiveness: The Institute suggested strengthening revenue stability by broadening the tax base, plugging loopholes, enhancing collection efficiency, and increasing non-tax revenue while maintaining a simple low tax regime. The budget similarly promotes diversified revenue sources with competitiveness in mind, aligning with the Institute's advocacy. (3) Effective use of government assets and franchises: The Institute advocated for a comprehensive inventory of government and public sector assets and franchises to enhance returns and cash flow in a more market-oriented manner (including franchises, revenue sharing, asset securitization, infrastructure or real estate investment vehicles, etc.). The budget emphasizes improving resource utilization efficiency and investment deployment with a development orientation, providing policy space to implement the aforementioned direction. (4) Precise expenditure control based on performance: The Institute recommended normalizing the review of public expenditure effectiveness and establishing measurable KPIs, regular review mechanisms, and sunset clauses for newly established funds, subsidies, or large promotional programs. The budget proposes enhancing governance effectiveness and ensuring public funds are used appropriately, which is consistent with the idea of balancing livelihood protection and expenditure control. (5) Investing in the future and cultivating new growth: The Institute supports focusing on the Northern Metropolis, innovation and technology, and industrial upgrading as the core of rebuilding growth momentum, and suggests promoting the digitalization of enterprises and professional services (such as electronic invoices, digital certificates, compliance technology) to enhance productivity and reduce compliance costs. The budget continues to invest in innovation and technology and new industries, aligning with the Institute's direction of "expanding the high-quality tax base by enhancing productivity." In terms of "expanding revenue," the association supports the government in strengthening the stability of government revenue by broadening the tax base, enhancing tax collection efficiency, and increasing non-tax revenue, while maintaining Hong Kong's simple low tax system and international competitiveness. The association suggests that the government conduct a comprehensive inventory of government and public sector assets and franchises, and explore ways to enhance asset returns and cash flow in a more market-oriented manner. At the same time, the association believes that policies can be designed more precisely for speculative activities or tax avoidance arrangements without affecting long-term investment and self-use demand, in order to enhance tax fairness and maintain market order. In terms of "cost-saving and efficiency enhancement," the association agrees that frontline services should not be cut in a one-size-fits-all manner, but rather that institutional means should be used to enhance the output of every dollar of public funds. The association recommends that the government normalize the review of public expenditure efficiency and establish clear and measurable KPIs, regular review mechanisms, and sunset clauses for newly established funds, subsidies, or large promotional programs, concentrating resources on policy areas with the greatest economic and social returns. In terms of "investing in the future and rebuilding growth momentum," the association supports the government in continuing to promote the Northern Metropolis and innovation and technology development, and accelerating implementation through more effective planning, land allocation, financing, and project management mechanisms to form industrial clusters and new increments. The association also suggests that the government use the digitization of enterprises and professional services as an important lever to promote electronic invoices, digital certificates, and compliance technology applications, assisting small and medium-sized enterprises in improving efficiency, reducing administrative costs, and enhancing business convenience, thereby expanding the high-quality tax base in the long term. The association expects the government to announce more specific implementation details and timelines for the budget measures as soon as possible, and to maintain close communication with the professional and business sectors to ensure that policies are effectively implemented. The association will continue to support the government in enhancing fiscal transparency, strengthening the efficiency of public resource allocation, and jointly promoting the rebuilding of confidence in Hong Kong under sound financial management, consolidating recovery, and nurturing new momentum