This is not so much a rant but an expression of support for the Government’s consideration as to whether the tax thresholds for deductibility with regard to funding individuals’ MPF contributions should be increased.
In my opinion it is extremely important for individuals to have a properly and adequately funded pension scheme, whether this is derived from a person’s employment or whether from a business conducted by a self-employed individual.
Of course, there is always the argument that a person should provide for his own retirement but I am a strong supporter that both the employer and individual, whether employed or self-employed, should be able to claim a tax deduction for such an expense. Not only would the implementation of the proposal assist the individual to fund their scheme and costs payable to the managers of the MPF scheme but it will also help the development of the fund and fund administration industry in Hong Kong.
I would hope that the maximum tax deductible employer’s contribution will be increased from 15% to 25% of the employee’s compensation and that the ceiling for the employee’s voluntary contribution be increased from HK$12,000 p.a. to 25% of the employee’s compensation package.
Whilst this is under review, a similar proposal should be introduced for self-employed persons as well as giving consideration to extending the range of products that will qualify under the scheme.
