Hong Kong minister hints at scrapping of MPF tax break proposal for elderly

Hong Kong’s labour minister has dropped the biggest hint yet that authorities intend to scrap a proposal to raise the tax deduction amount for employers’ voluntary pension contributions to older workers, a plan for encouraging greater workforce participation.

Secretary for Labour and Welfare Chris Sun Yuk-han said on Wednesday that a government working group on promoting the silver economy decided that the proposed tax initiative “complicated” the policy objective of the Mandatory Provident Fund (MPF).

“The restriction on employees receiving voluntary contributions also casts doubt on the effectiveness of the proposal,” he told lawmakers at a Legislative Council meeting.

Asked by the Post whether the government had given up on the proposal, the Labour and Welfare Bureau said it had no further details to add.

But lawmaker Lam Chun-sing said the minister’s remarks suggested that authorities would not consider the proposal in the short term, a move he opposed.

Financial Secretary Paul Chan Mo-po, in his 2023-24 budget blueprint, suggested increasing the tax deduction for employers’ voluntary MPF contributions to staff aged 65 or above. The rate would have risen from 100 per cent to 200 per cent to help encourage the employment of elderly workers.