The Hong Kong government is once again considering tax increases on the city's wealthiest residents to address budget deficits.

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This is according to a Bloomberg report quoting sources.

Hong Kong plans raising 16 per cent tax rate for rich

During recent public consultations, Hong Kong authorities discussed the possibility of increasing the current 16 per cent tax rate on incomes over 5 million Hong Kong dollars or 642,000 US dollars.

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Reducing the threshold so more individuals might qualify for the highest tax band was another potential solution discussed.

However, it was unclear if any specific plans had been finalised or whether the administration would follow through on the preliminary consultation.

A spokesperson from the financial secretary's office said, "During the budget consultation process, we received diverse proposals from different sectors and members of the public."

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The spokesperson added, "We do not comment on individual proposals or speculations."
If carried out, this measure would be the second consecutive year of increases in tax rates.

Last year's move was a surprise hike to the highest rate not seen in twenty years.

After the harsh COVID years and political turmoil, the Asian financial centre's economy is struggling to grow.

The country is now attempting to recover from a talent drain while facing severe deficits.

(With inputs from the agencies)