Government Unveils New Export Incentives and Tax Credits for SMEs
HONG KONG — In a strategic and comprehensive bid to bolster the city's trade competitiveness, the government has announced a significant package of new export incentives and targeted tax credits designed to provide direct financial support to small and medium-sized exporters (SMEs). The policy initiative is a direct response to rising global supply chain costs, particularly the sharp increase in international freight rates and the ongoing pressure from geopolitical trade tensions that have squeezed profit margins.
Key components of the newly unveiled package include a 150% tax deduction on specific overseas marketing and exhibition expenses, recognizing the need for SMEs to re-establish global trade connections post-pandemic. Additionally, a new, temporary subsidy program has been established to help offset the high freight costs for container shipments to critical markets, specifically including North American and European destinations. Eligibility for the freight subsidy is tightly tied to a firm's demonstrated percentage of total revenue derived from export activity, ensuring the aid is channeled precisely to genuine, high-value exporters.
Addressing Supply Chain Pain Points
The government openly acknowledged that many smaller firms lack the bargaining power of major multinational corporations to negotiate favorable logistics contracts. The targeted subsidies are specifically intended to level the playing field, ensuring that Hong Kong's vital manufacturing and trading base remains cost-competitive on the international stage, despite volatility in the global shipping industry.
"This incentive scheme is a crucial, non-inflationary intervention at a time when export margins are under severe strain. It demonstrates a clear commitment from the government to preserving the structural integrity of our trade sector. This is fiscally responsible aid that is directly measurable by its intended outcome: export volume growth and job retention within the SME community," remarked the Secretary for Commerce and Economic Development.
The Legislative Council is expected to fast-track the necessary appropriations to ensure rapid implementation, with the tax credits effective retroactively for the current fiscal year. The program is designed to be reviewed after two years to comprehensively assess its impact on the city's overall trade balance, the resilience of the SME community, and the necessary long-term structure of Hong Kong's export economy.