The article discusses the impact of budget cuts on non-profit organizations in Hong Kong, focusing on potential tax burdens and the need for clear tax exemptions. It outlines the current tax arrangements and the Government's response to the issue.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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The Budget for the fiscal years 2024-2025 to 2027-2028 proposes a cumulative reduction of seven per cent in government expenditure, significantly impacting the resources of non-profit organizations.
In response to concerns regarding social welfare services due to financial constraints, the government has proposed measures to mitigate the effect of these expenditure cuts.
Under current regulations, some government-subsidised non-profit organizations may still be subject to taxation. The Inland Revenue Department assesses tax obligations based on business profits or rental income, not on government subsidies.
The Inland Revenue Ordinance offers tax exemptions for charities, but non-profit-making organizations may not be fully exempt from taxation. Detailed statistics on taxes collected from subvented non-profit organizations are not maintained by the Department.
Government bureaux ("B/Ds") engage various organizations, including non-profit-making organizations, to provide public services. The government has introduced support measures to ease financial burdens, increase flexibility, and reduce administrative workload. Eighteen welfare programs have been exempted from expenditure cuts.
B/Ds will evaluate the financial situation of relevant non-profit organizations to provide necessary advice or support.
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