INTELLIGENCE BRIEFING: Fiscal Turnaround Tests Hong Kong’s Giveback Strategy
![muted documentary photography, diplomatic setting, formal atmosphere, institutional gravitas, desaturated color palette, press photography style, 35mm film grain, natural lighting, professional photojournalism, A ceremonial ledger bound in red silk, lying centered on a polished sandalwood table, its gold seal unbroken, delicate ink calligraphy visible beneath glassine paper, side-lit by narrow beams from tall arched windows, atmosphere of hushed anticipation in a cavernous colonial hall draped with muted bunting. [Bria Fibo]](https://081x4rbriqin1aej.public.blob.vercel-storage.com/viral-images/6a0d34b7-b111-4fbb-8860-9b444f333639_viral_0_square.png "muted documentary photography, diplomatic setting, formal atmosphere, institutional gravitas, desaturated color palette, press photography style, 35mm film grain, natural lighting, professional photojournalism, A ceremonial ledger bound in red silk, lying centered on a polished sandalwood table, its gold seal unbroken, delicate ink calligraphy visible beneath glassine paper, side-lit by narrow beams from tall arched windows, atmosphere of hushed anticipation in a cavernous colonial hall draped with muted bunting. [Bria Fibo]")
Hong Kong’s stamp duty surge mirrors Singapore’s 2021 equity-driven revenue spike—both saw frozen tax brackets widen the effective rate for middle earners, while infrastructure outlays constrained discretionary spending. Competitiveness hinges not on the size of givebacks, but on whether they anchor talent retention amid global mobility shifts.
INTELLIGENCE BRIEFING: Fiscal Turnaround Tests Hong Kong’s Giveback Strategy
Executive Summary:
Hong Kong’s fiscal position is poised for a sharp recovery, driven by a stock market boom that has quadrupled stamp duty revenue. With a projected HK$156 billion surplus in 2025–26, pressure mounts for the government to deliver targeted 'givebacks'—especially for the strained middle class. While tax relief offers political upside, fiscal prudence is essential amid volatile markets and massive infrastructure commitments. The upcoming budget will test the Financial Secretary’s ability to balance public expectations with long-term stability.
Primary Indicators:
- Stock market daily turnover surged to HK$200–300 billion, up from HK$80 billion in 2019
- Stock stamp duty revenue reached HK$44 billion in first half of 2025–26, up 143% YoY
- Projected full-year stamp duty revenue nears HK$100 billion, potentially surpassing land sales
- Personal and salaried tax income rose from HK$62.7 billion (2015–16) to HK$97.1 billion (2024–25)
- Basic personal allowance unchanged since 2016 (HK$132,000)
- Standard tax bracket unchanged since 2018 (HK$500,000)
- One-time tax relief reduced from HK$20,000 (2014–2020) to HK$1,500 (2024–25)
Recommended Actions:
- Increase basic personal allowance and standard tax bracket to reflect inflation and wage growth
- Restore one-time tax reduction to HK$10,000 to support middle-income earners
- Target tax relief measures specifically at salaried middle class to maximize social impact
- Evaluate conditional giveback schemes to ensure local economic circulation
- Maintain fiscal buffers for market downturns and infrastructure funding
- Announce medium-term fiscal strategy to anchor public expectations
Risk Assessment:
Beneath the gleam of a recovering fisc lies a fragile equilibrium. The surge in stamp duty is a double-edged sword—tied not to structural economic strength, but to speculative market fervor. Should equities cool, the treasury’s newfound breath could vanish overnight. Yet restraint carries its own peril: a disillusioned middle class, taxed into higher brackets by frozen thresholds, may erode confidence in the administration. And while the Northern Metropolis looms with its trillion-dollar price tag, every dollar given today must be weighed against the storms of tomorrow. The true test is not generosity—but foresight masked as compromise.
—Catherine Ng Wei-Lin
Published February 20, 2026