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Government's support for small and medium businesses outlined
The Financial Secretary, Mr Donald Tsang, said the Government would continue to offer meaningful support services which were particularly beneficial to small and medium enterprises (SMEs).
Speaking at a luncheon of the Harvard Club of Hong Kong today (Wednesday), Mr Tsang said SMEs accounted for 98 per cent of all businesses in Hong Kong and they were the major beneficiaries of the government support programme.
SMEs are defined in Hong Kong as manufacturing enterprises employing less than 100 people or service enterprises employing less than 50 people. In 1995, nearly 300,000 establishments in Hong Kong belonged to the SME category.
"This shows quite clearly that the dynamism and agility of SMEs has been the foundation of Hong Kong's economic success," Mr Tsang said.
He said while the Government did not accord special treatment based on the size of businesses, it did offer support to industry and business in Hong Kong.
Mr Tsang said there were three myths regarding the perceived lack of support by Government for SMEs.
The first myth was that Government did nothing to help lower the cost of doing business for SMEs, he said.
"The fact is that it is against our fundamental economic philosophy to single out specific sectors of businesses for special treatment.
"However, we make sure that, within the framework of a free market economy and of high integrity in our local markets, we are sustaining the best possible business- friendly environment in the world."
He said corporate tax rate in Hong Kong was among the lowest in the region and no tax was payable on dividend income, interest, value-added or capital gains.
The Government had also done its bit to dampen property price inflation and keep down rentals to contain the costs of accommodation.
"While costs of doing business in the East Asia region are rising and matching Hong Kong's levels, the crucial element for a foreign firm to decide where in Asia it should establish its base is not costs. It is profit," he said.