Hong Kong SAR: Diversifying and Broadening Revenue

Hong Kong SAR has faced persistent fiscal pressures amid declining fiscal revenue associated with changes in land use (land premiums), reduced stock market initial public offerings, headwinds to corporate profits, and weakness in the labor market. While recent revenue measures have provided partial relief, medium- to long-term pressures from population aging, rising social and healthcare spending, pensions, and large-scale public investment are expected to intensify. Maintaining strong fiscal buffers remains critical for monetary and financial stability. This paper examines options to strengthen revenue mobilization and broaden the tax base to support fiscal sustainability and long-term resilience.