Hong Kong cuts taxes to rival Singapore

The competition between
and Singapore for the position as Asia’s financial centre intensified
when Donald
, its chief executive, announced a one percentage point cut in income
and corporate taxes this week.

Tsang said in his first annual policy address since his election to a
five-year term in March, income tax and corporate tax, would be cut to 15% and
16.5%, respectively in 2008-09.

The reduction is expected to widen the gap with Singapore, which cut its
corporate tax rate by two points in February, to 18%, hoping to attract more
financial services and technology companies.

Tsang pledged in his election campaign to cut the standard rate of income and
corporate taxes to 15% in five years.

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