Hong Kong Law Journal
2017, Vol 47, Issue 1, pp 143-170
Abstract: The Global Competitiveness Index reveals that Hong Kong’s relative underperformance compared to Singapore is because it has lagged behind in boosting local innovation and performed less satisfactorily in technological advancement. This can be regarded as a result of inadequate government support. The Hong Kong government’s stubborn belief in its tax system prevents it from making a timely response to the changing environment. A global trend of providing generous tax incentives has made the tax system in Hong Kong less competitive in boosting and attracting investment into innovation. What can Hong Kong learn from experience elsewhere? This article explores the necessity of adopting research and development (R&D) tax incentives to spur innovation and achieve the technological advancement the Hong Kong government desires. The introduction of the R&D tax incentives in Hong Kong proposed in this article may present an opportunity for Hong Kong to keep up with the global trend of prioritising innovation.