(Source : Information Services Department)
Enhanced tax incentive to promote renewable energy and building energy efficiency
The Government has proposed in the 2018-19 Budget released yesterday (February 28) that to promote the development of renewable energy and use of energy-efficient building installations for a low-carbon future, starting from the 2018-19 financial year, the capital expenditure on these installations can be fully deducted in the first year of purchase, instead of five years as currently stipulated.
The Secretary for the Environment, Mr Wong Kam-sing, today (March 1) said, "Providing an enhanced tax incentive for renewable energy and energy-efficient building installations will further encourage adoption of renewable energy and energy saving in the community."
To encourage the business community to adopt environmentally friendly machinery and equipment, capital expenditure on such equipment has been fully deductible in the first year of assessment since 2008-09. At the same time, the deduction period for capital expenditure on renewable energy and energy-efficient building installations has been shortened from 25 years to five years. The new proposal will align the tax incentive treatment of renewable energy and energy-efficient building installations with that of environmental protection machinery to further encourage adoption of renewable energy and energy saving in the community.
The Government promulgated in 2015 the Energy Saving Plan for Hong Kong's Built Environment 2015~2025+, which sets a target of reducing Hong Kong's energy intensity by 40 per cent by 2025. The Government is implementing different measures to encourage the community to work together towards this ambitious target.
In order to enjoy the tax incentive for energy-efficient building installations, the building concerned must be registered under the voluntary Energy Efficiency Registration Scheme for Buildings operated by the Electrical and Mechanical Services Department (EMSD). The building should also reach specified standards under a green building certification system, such as BEAM Plus certification. As all the specified standards are above the statutory requirements, buildings that achieved those energy-efficient performance standards may then enjoy the enhanced tax incentive. Details are available at the EMSD's web page: www.emsd.gov.hk/en/energy_efficiency/energy_efficiency_registration_scheme_for_building/index.html.
Renewable energy installations such as solar photovoltaic panels and wind turbines are eligible for the same tax incentive.
The Government will also reinforce its drive to install renewable energy installations at government buildings, venues and community facilities. The relevant funding reserved will be increased from $200 million to $1 billion for application by government bureaux and departments. Upon completion of all renewable energy projects, the total annual electricity generated is estimated to be over 6 million kilowatt-hours.
"Encouraging different stakeholders in the community to adopt renewable energy and use energy-efficient green buildings has been our priority task in mitigating climate change. The Government will lead by example and encourage the community to join hands in fostering renewable energy development and energy saving," Mr Wong added.
Issued at HKT 16:40