Highlights of Hong Kong 2025/26 Budget
Source : The 2025-26 Budget[](https://www.budget.gov.hk/2025/eng/pf.html)
Post of Hong Kong Budget 2025-2026
- The Hong Kong 2025/26 Budget highlights include increased spending on infrastructure and social services, a new billion fund for an AI institute, and a focus on strengthening Hong Kong's position as an international financial and trade center. The budget also anticipates a consolidated deficit of billion for 2025-26. Other key areas include a new tax incentive for the shipping industry, a drive to develop Hong Kong as an aircraft dismantling hub, and incentives to boost the tourism industry.
Economic and fiscal
Economic performance
Economic performanc: The economy grew by 2.5%
in the previous year, with exports up by 4.7%
Government finance
Total government revenue is estimated at $HK9.4 billion.
Total government expenditure is estimated at $HK2.3 billion.
A consolidated deficit of $HK billion is forecast for 2025-26.
Fiscal reserves are predicted to be around $HK7.3 billion as of March 31, 2025, and decrease to $HK0.3 billion by the end of March 2026.
Taxation and revenue
Introduction of the global minimum tax proposal will bring in an estimated $HK billion annually.
Increase in air passenger departure tax from $HK0 to $HK0, effective October 2025.
Review of tunnel tolls, electric vehiclelicence fees, and parking meter charges to increase revenue by an estimated $HK billion.
Introduction of a $HK0 application fee for various talent and capital investor admission schemes.
Industry and innovation
Artificial Intelligence
A $HK billion fund will be established to set up an AI research and development institute, along with a three-year subsidized scheme to access the Cyberport AI supercomputing center.
Financial and trade services
Expansion of the tax treaty network, especially with Belt and Road jurisdictions.
Tax exemptions for certain intellectual property-related expenditures will be reviewed and enhanced.
Waiving the buy-side stamp duty on stock trading to boost trading volume.
Shipping and aviation
Establishment of the Hong Kong Maritime and Port Development Board.
Promotion of Hong Kong as Asia's first aircraft dismantling, parts recycling, processing, and trading center.
Allocation of funding to promote the use of sustainable aviation fuel.
Other key highlights
Housing
The government plans to provide 190,000 public housing units over the next five years and expects the completion of over 17,000 private residential units annually.
Tourism
An allocation of $HK.23 billion to the Hong Kong Tourism Board to implement "tourism is everywhere" initiatives.
Infrastructure and development
Continued investment in capital works projects, including infrastructure, housing, and education.
Focus on green development through a $HK0 million subsidy scheme to install fast chargers and funding for electric buses and taxis.
Public sector
Reduction in the rate of reduction of recurrent government expenditure from 1% to 2% in 2025-26.
Civil servants will face a pay freeze for the fiscal year.
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Corporate Tax
Hong Kong adopts territorial tax system. Profits tax shall be charged on every person carrying on trade, profession or business in Hong Kong in respect of the profits arising in or derived from Hong Kong from such trade, profession or business regardless of the nationality, domicile or residence of a person.
Individual Tax
Hong Kong salaries tax is charged on every individual in respect of his/her income arising in or derived from any office, employment or any pension in Hong Kong. All income from a “Hong Kong sourced employment” is liable to tax irrespective of the locations for rendering the services, subject only to certain statutory exemptions.
Tax Investigation and Filed Audit Support
Hong Kong upholds simple tax system and its tax rate is one of the lowest in the world which requires a high degree of compliance of taxpayers. In order to protect government revenue, the IRD will review the submitted tax returns periodically by way of field audit and investigation.
Tax Policies in Hong Kong
Double Taxation Relief / Withholding Taxs / Advance Ruling in Hong Kong
/ Common Reporting Standard ("CRS") and Automatic Exchange of Financial Account Information ("AEOI")
/ Common Reporting Standard ("CRS") and Automatic Exchange of Financial Account Information ("AEOI")