Hong Kong SAR: Diversifying and Broadening Revenue

Selected Issues Papers, June 17, 2026

Source details

Hong Kong SAR has faced persistent fiscal pressures amid:
- declining fiscal revenue associated with changes in land use (land premiums)
- reduced stock market initial public offerings
- headwinds to corporate profits
- weakness in the labor market
Recent revenue measures have provided partial relief.
Medium- to long-term fiscal pressures expected to intensify from:
- population aging
- rising social and healthcare spending
- pensions
- large-scale public investment
Maintaining strong fiscal buffers remains critical for monetary and financial stability.
The paper examines options to strengthen revenue mobilization and broaden the tax base to support fiscal sustainability and long-term resilience.

Revenue mobilization and tax-base broadening as central policy objectives.
Interactions between fiscal buffers and monetary/financial stability emphasized.
Attention to structural drivers of revenue decline (land premiums, IPO activity, corporate profits, labor market conditions).
Consideration of medium- and long-term spending pressures (demographics, social and healthcare outlays, pensions, investment).

Authors: Dan Devlin, Yizhi Xu
Publication date: June 17, 2026
Pages: 26
Volume: 2026
Issue: 047
Series: Selected Issues Paper No. 2026/047
DOI: https://doi.org/10.5089/9798229051576.018
Stock No: SIPEA2026047
ISBN: 9798229051576
ISSN: 2958-7875
Subject: Consumption, Income, National accounts, Personal income tax, Revenue administration, Taxes, Value-added tax
Keywords: Asia and Pacific, broadening revenue, Consumption, Fiscal Policy, Global, Hong Kong SAR, Hong Kong SAR Financial Services and the Treasury Bureau, IMF country, IMF staff, Income, issues paper, Personal income tax, Revenue Mobilization, Tax Policy, Value-added tax

Source: "Hong Kong SAR: Diversifying and Broadening Revenue", Selected Issues Papers (2026), by Dan Devlin and Yizhi Xu, June 17, 2026.