Financial Secretary John Tsang imposed a one-off tax reduction of 75 per cent of salaries tax and tax under personal assessment for 2007-08, subject to a ceiling of $25,000. About 1 million taxpayers would pay no more than $5,000 in tax after the reduction. At the same time raising the basic allowance and the single parent allowance from $100,000 to $108,000, and increasing the married person’s allowance from $200,000 to $216,000, which in turns all the major allowances and tax rates will have reverted to their 2002-03 levels.
On the other hand, Mr. Tsang imposed lowering of the salaries tax and personal assessment tax standard rate by one percentage point, to 15%, and lowering the profits tax to 16.5%. He also imposed widening the tax bands from $35,000 to $40,000.