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Anti-tax evasion bill passed

Source: Hong Kong Information Services

The Hong Kong Special Administrative Region Government today welcomed the Legislative Council’s passage of a bill which seeks to tackle tax evasion risks arising from the digitalisation of the economy.

The Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Bill 2024, formulated in accordance with the Base Erosion & Profit Shifting 2.0 (BEPS 2.0) package promulgated by the Organisation for Economic Co-operation & Development, introduces the global minimum tax (GMT) and the Hong Kong minimum top-up tax (HKMTT) starting January 1, 2025.

It is estimated that the new regimes will bring in an additional revenue of about $15 billion per year from 2027-28 to the Hong Kong SAR Government.

Secretary for Financial Services & the Treasury Christopher Hui said the implementation of the GMT and the HKMTT highlights Hong Kong’s staunch support to international co-operation in tackling cross-border tax evasion, and safeguards Hong Kong’s taxing rights.

“With the 15% GMT for in-scope multinational enterprise (MNE) groups in place, countries and regions can no longer compete for capital and investment by simply lowering their corporate income tax rates.

“With a fairer global taxation environment, our unique advantages such as ‘one country, two systems’, excellent connectivity, first-class infrastructure, mature financial markets, quality talent pools, East-meets-West vibes etc will become even more accentuated to showcase Hong Kong as a premier destination for doing business.”

Under BEPS 2.0, MNE groups with an annual consolidated revenue of 750 million euros or above in at least two of the four fiscal years immediately preceding the current fiscal year will need to pay a GMT of at least 15% on profits derived from every jurisdiction in which they operate.

By imposing the HKMTT, the Hong Kong SAR Government will have the first priority in collecting top-up tax from entities of an MNE group with an effective tax rate (ETR) in Hong Kong below 15%, in order to raise the ETR to 15%. Otherwise, the top-up tax may be collected by other BEPS 2.0-implementing jurisdictions in which the group also operates. Moreover, Hong Kong’s taxing rights would then be ceded to other jurisdictions.

The Hong Kong SAR Government added that the GMT and HKMTT regimes have incorporated a number of features to facilitate compliance by in-scope MNE groups.

The Inland Revenue Department has set up a dedicated team to provide technical support and answer enquiries about BEPS 2.0. The department will also publish online guidance addressing common concerns.

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Hong Kong Customs seizes suspected methamphetamine and suspected cannabis buds at airport (with photos)

Source: Hong Kong Government special administrative region

Hong Kong Customs seizes suspected methamphetamine and suspected cannabis buds at airport  
The first case involved a 37-year-old woman who arrived in Hong Kong from Kuala Lumpur, Malaysia, yesterday. During customs clearance, Customs officers found a batch of suspected methamphetamine, weighing about 6kg, concealed inside some tea leaf packaging bags in her check-in suitcase. She was subsequently arrested.
 
After an investigation, the arrested person has been charged with one count of trafficking in a dangerous drug. The case will be brought up at the West Kowloon Magistrates’ Courts tomorrow (May 29).
 
The second case involved a 21-year-old male passenger who arrived in Hong Kong from Bangkok, Thailand, this morning. During customs clearance, about 12kg of suspected cannabis buds were seized from his check-in suitcase. The man was subsequently arrested. The dangerous drugs were packed in plastic bags and vacuum bags and were mix-loaded with personal belongings.
 
The investigation of the second case is ongoing.
 
Customs will continue to step up enforcement against drug trafficking activities through intelligence analysis. The department also reminds members of the public to stay alert and not participate in drug trafficking activities for monetary return. They must not accept hiring or delegation from another party to carry controlled items into and out of Hong Kong. They are also reminded not to carry unknown items for other people.
 
Customs will continue to apply a risk assessment approach and focus on selecting passengers from high-risk regions for clearance to combat transnational drug trafficking activities.
 
Under the Dangerous Drugs Ordinance, trafficking in a dangerous drug is a serious offence. The maximum penalty upon conviction is a fine of $5 million and life imprisonment.
 
Members of the public may report any suspected drug trafficking activities to Customs’ 24-hour hotline 182 8080 or its dedicated crime-reporting email account (crimereport@customs.gov.hkIssued at HKT 18:55

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Police to add over 1.2k recruits

Source: Hong Kong Information Services

The Police Force has a target of recruiting 130 probationary inspectors and 1,140 police constables for the 2025-26 financial year.

Secretary for Security Tang Ping-keung told legislators today that as at March 31 this year, the numbers of vacancies in the force for the grades of rank and file, inspectorate officers and gazetted officers, ie Superintendents and above, were 5,500, 236 and 29 respectively.

The overall number of vacancies was 5,765, representing a vacancy rate of about 17.4%, which is similar to figures over the past three years.

To enhance the effectiveness of recruitment efforts, the force has adopted a multi-pronged approach. Besides conducting recruitment exercises throughout the year, it organises various recruitment activities on a regular basis.

Additionally, the force has expanded its recruitment network by conducting recruitment exercises at universities worldwide.

Mr Tang said the rise in the number of people applying to join the Police Force in recent years shows that its recruitment strategies are effective.

He added that the force will align with the Government’s requirement to reduce the civil service establishment by 2% each year in 2026-27 and 2027-28, while continuing to review and assess the effectiveness of using different resources.

By re-establishing work priorities, appropriately redeploying staff and using technologies to enhance operational effectiveness, he stressed, the force will ensure that the adjustment in numbers does not affect the efficiency and provision of its services, and that it will continue to provide the public with high-quality and efficient policing.

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LCQ16: HKSAR Government Scholarship Fund

Source: Hong Kong Government special administrative region

LCQ16: HKSAR Government Scholarship Fund 

Academic year($ million)($ million)($ million)($ million)($ million) 

 ($ million)Issued at HKT 18:38

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Expert group members reappointed

Source: Hong Kong Information Services

The Government today announced the reappointment of 59 members of the Chief Executive’s Policy Unit (CEPU) Expert Group for one year, starting from May 30.

CEPU Head Stephen Wong thanked the expert group members for putting forth their views and suggestions proactively, as well as for their generous sharing of expertise, insights and research findings in their respective fields over the past year. He said their contributions have provided important references for the Policy Address.

Mr Wong added that he looks forward to maintaining close liaison and co-operation with the expert group members in the coming year, and working together to assist the Government on the 2024 Policy Address goal of “Reform for Enhancing Development & Building Our Future Together”.

He noted that the interaction between the CEPU and expert group members took various forms in the past year, which included plenary meetings, forums, seminars, sharing sessions, group discussions, individual meetings, visits and written exchanges.

“The CEPU also invites universities and think tanks from the community that have received funding support under the Public Policy Research Funding Scheme and the Strategic Public Policy Research Funding Scheme to organise opening and concluding seminars.

“Members of the expert group are invited to provide views from their industry perspectives to enhance the applicability of the research studies. They also serve as external examiners for the two funding schemes, assisting in vetting relevant research proposals and advising on funding applications.”

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Algernon Yau to visit Japan

Source: Hong Kong Information Services

Secretary for Commerce & Economic Development Algernon Yau will depart for Tokyo, Japan, tomorrow to attend the Asia-Pacific Telecommunity (APT) Ministerial Meeting and meet government officials and business leaders there.

During the two-day meeting to be held on Friday and Saturday, Mr Yau and participating ministers will attend discussion sessions on various topics related to information and communications technology development.

They include sustainable digital infrastructure and accessibility, inclusive digital innovation and growth, secure and trusted digital environment, and empowering the Asia-Pacific industry’s role in digital transformation.

The ministerial meeting will adopt a joint statement to further foster regional collaboration.

The APT is an intergovernmental organisation with the aim of promoting information and communication technology development in the Asia-Pacific region. It has 38 members, four associate members and 140 affiliate members from private companies and academia.

During his stay in Tokyo, Mr Yau will promote Hong Kong’s business advantages and opportunities to government officials and business leaders there.

The commerce chief will return to Hong Kong on Saturday evening. Under Secretary for Commerce & Economic Development Bernard Chan will be the Acting Secretary during Mr Yau’s absence.

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Incoming passenger convicted and jailed for possessing duty-not-paid cigarettes

Source: Hong Kong Government special administrative region

Incoming passenger convicted and jailed for possessing duty-not-paid cigarettes 
Customs intercepted an incoming 32-year-old male passenger at the China Ferry Terminal in Tsim Sha Tsui yesterday (May 27) for Customs clearance. Four thousand two hundred sticks of duty-not-paid cigarettes, with an estimated market value of about $17,200 and a duty potential of about $13,900, were seized from a suitcase carried by him. The male passenger was subsequently arrested.
 
Customs welcomes the sentence. The custodial sentence has imposed a considerable deterrent effect and reflects the seriousness of the offences. Customs reminds members of the public that under the DCO, tobacco products are dutiable goods to which the DCO applies. Any person who deals with, possesses, sells or buys illicit cigarettes commits an offence. The maximum penalty upon conviction is a fine of $1 million and imprisonment for two years.
 
Members of the public may report any suspected illicit cigarette activities to Customs’ 24-hour hotline 182 8080 or its dedicated crime-reporting email account (crimereport@customs.gov.hkIssued at HKT 17:40

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Fraudulent website and internet banking login screen related to China Construction Bank (Asia) Corporation Limited

Source: Hong Kong Government special administrative region

Fraudulent website and internet banking login screen related to China Construction Bank (Asia) Corporation Limited 
The HKMA wishes to remind the public that banks will not send SMS or emails with embedded hyperlinks which direct them to the banks’ websites to carry out transactions. They will not ask customers for sensitive personal information, such as login passwords or one-time password, by phone, email or SMS (including via embedded hyperlinks).
 
Anyone who has provided his or her personal information, or who has conducted any financial transactions, through or in response to the website or login screen concerned, should contact the bank using the contact information provided in the press release, and report the matter to the Police by contacting the Crime Wing Information Centre of the Hong Kong Police Force at 2860 5012.
Issued at HKT 17:35

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LCQ14: Handling water mains leakage

Source: Hong Kong Government special administrative region

LCQ14: Handling water mains leakage 
Question:
 
     It is learnt that the issue of water mains leakage in Hong Kong has become increasingly serious in recent years. There are views that the Water Supplies Department (WSD) should address this problem promptly to ensure the efficient use of water resources. In this connection, will the Government inform this Council:
 
(1) of the total volume of fresh water leaked from private water mains in each of the 18 districts in the territory in the past five years; and the following information on the top 10 private housing courts with the most severe water mains leakage: (i) name; (ii) year of completion; (iii) volume of water leakage involved; (iv) number of Repair Notices (RNs) and Disconnection Notices (DNs) received from the WSD; (v) number of times the water supply was suspended by the WSD; and (vi) repairs to the leaking water mains;
 
(2) given that according to the WSD’s website, the number of RNs issued by the WSD under Section 16 of the Waterworks Ordinance (Cap. 102) (the Ordinance) was around 700 to 1 000 per year in the past 10 years with no apparent downward trend while the number of DNs issued under Section 11 of the Ordinance and the number of disconnection cases under Section 10 of the Ordinance have shown a decreasing trend, whether the WSD has studied the reasons for this situation;
 
(3) given that according to the WSD’s website, the leakage rate of government water mains was approximately 13.4 per cent in 2024, and the WSD has also set a target to reduce the leakage rate to 10 per cent or below by 2030, but there are views that the aforesaid rate fails to cover the leakage situation of all water mains (e.g. leakage from non-government water mains), whether the WSD has plans to consolidate and make public the complete statistics concerned, and give an account of the annual amount of water loss from the water mains in the territory and the reasons for such loss in its annual reports; if so, of the details; if not, the reasons for that; and
 
(4) whether the WSD has plans to set up a committee to take full responsibility for and handle water mains leakage, and to expedite the implementation of “smart waterworks” through coordinating work across different departments and introducing new technologies, so as to further implement “smart leakage control”; if so, of the details and the timetable; if not, the reasons for that?
 
Reply:
 
President,
 
     The Water Supplies Department (WSD) has been striving to enhance the management and maintenance of water mains and apply new technologies to enable effective operation of the water supply networks.
 
     Regarding government water mains, the WSD implemented a territory-wide water mains replacement and rehabilitation programme between 2000 and 2015 to replace and rehabilitate about 3???000 kilometres long aged water mains (including fresh and salt water mains), thereby raising the operational condition of the water supply networks. Since 2015, the WSD has implemented multi-pronged measures in phases, through establishment of Water Intelligent Network (WIN) and formulation and implementation of risk-based water mains improvement works under a risk-based asset management programme for water mains to continuously maintain the healthiness of the water supply networks and reduce the risks of water main bursts or leaks. Through these measures and efforts over the years, the leakage rate of fresh water mains has dropped from over 25 per cent in 2000 to around 13.4 per cent in 2024. 
 
     The replies to various parts of the Hon Yung Hoi-yan’s question are as follows:
 
(1) Regarding the leakage of private fresh water mains (Note), the WSD calculates the volume of water loss in the communal service of a building by deducting the total fresh water consumption recorded by all water meters of individual units in the building from the master meter reading of the building to help monitor the fresh water leakage in the communal service of the building. The WSD has installed master meters in public housing estates across the territory and is currently installing master meters in private buildings in phases. Since not all buildings have been equipped with master meters, the WSD can currently only estimate the leakage rate and total volume of water loss of private fresh water mains over the past five years by referencing the volume of fresh water loss in buildings with master meters installed. The estimated results are as follows:
 

Year     As mentioned by the Hon Yung Hoi-yan, the WSD will follow up with the housing estates concerned regarding cases of suspected leakages in private fresh water mains and will issue Repair Notices (RNs) as necessary under section 16 of the Waterworks Ordinance (the Ordinance). If no follow-up action had been taken by the deadline, the WSD will, taking into account the actual circumstances (e.g. larger scale of repair, more complicated pipe connections which require longer time for project planning and repair arrangement, etc), issue Disconnection Notices (DNs) in accordance with section 11 of the Ordinance for non-compliant cases with the RNs, where no valid justification are provided, to arrange for suspension of water supply to reduce fresh water loss. 
 
     The issuance of RNs or DNs to private housing estates involves case-specific circumstances. To avoid public misinterpretation and doubt, we consider it inappropriate to unilaterally provide the names of the housing estates.
 
(2) In recent years, the WSD has allocated resources to actively follow up the leakage in private fresh water mains. If water loss is identified, the WSD will issue RNs to owners as early as possible, requiring them to properly repair the leaking fresh water mains so as to reduce fresh water wastage. The WSD has also stepped up publicity targeting at property management companies for enabling them to distinguish between the maintenance responsibilities of the inside service in individual flats and that of the communal service in a building. This helps property management companies depict the respective responsibilities to fresh water consumers so that the water mains repair works can be carried out promptly. Also, the WSD actively provides technical support to consumers with difficulties for early compliance of the RNs. According to the WSD’s record, most of the consumers have complied with the RNs and repaired the leaking water mains, resulting in a decrease in the number of DNs issued and the number of water disconnection cases executed by the WSD under sections 11 and 10 of the Ordinance respectively.
 
(3) The WSD has consistently addressed the public concerns on the leakage of government water mains by providing the annual leakage rate of government water mains in its annual reports, and has emphasised the target of reducing the leakage rate of fresh water mains of government network (as a percentage of total water supply) to 10 per cent or below by 2030.
 
     As for the leakage of private fresh water mains, since many private housing estates still do not have master meters installed, the WSD is unable to fully grasp accurate data on the volume of water leakage of private housing estates in Hong Kong. As mentioned earlier, the leakage rate (as a percentage of total water supply) in 2024 was estimated to be approximately 11.6 per cent. We understand that the public is concerned about the leakage of private fresh water mains. As more private buildings progressively install master meters, the WSD will publish the leakage rate of private fresh water mains in future annual reports in a timely manner, following the practice adopted for the leakage rate of government water mains.
 
(4) The WSD has set up the Standing Committee on Unaccounted for Water, chaired by the Deputy Director of Water Supplies, with functions including monitoring the leakage situation of government water mains and private fresh water mains, and steering and co-ordinating the water loss management work of different divisions within the WSD, etc. In June 2024, the WSD established the Digital Water Office to drive for digitalisation of water supply services, to formulate and expedite the development of smart water strategy, and to implement a series of digitalisation projects and measures in phases such as the expansion and upgrade of WIN to fully cover the fresh water supply networks and gradually upgrade the sensors for monitoring the water flow and water pressure of water mains to collect real-time data. Advanced Metering Infrastructure systems are also being installed in private buildings to monitor real-time water consumption for early detection of leaking fresh water mains. While the full digitalisation of water supply system is being implemented in a progressive manner, the water loss will be further improved gradually. The WSD will also actively maintain close contact with relevant stakeholders to explore different solutions for facilitating reduction of water loss.
 
Note: According to the WSD, the leakage of private fresh water mains includes the leakage of the communal service in various buildings (private buildings and public housing estates).
Issued at HKT 17:32

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