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The Mandatory Provident Fund Schemes Authority (MPFA) welcomes the Government’s proposal to introduce tax incentives for voluntary Mandatory Provident Fund (MPF) contributions which will further strengthen the retirement protection function of the MPF System.
 
The MPF System plays an important role in the overall retirement protection system in Hong Kong and the MPFA welcomes any measures that will encourage scheme members to make more contributions to boost their long-term retirement savings.
 
The MPFA will render full support to the Government to implement the new measure as soon as possible.
 
At present, employees can claim tax deductions for their employee’s mandatory contributions made to an MPF scheme, up to $18,000 for each assessment year. Self-employed persons can also claim tax deductions for their own mandatory contributions to an MPF scheme with the same cap. Voluntary contributions made by employees or self-employed persons are however not tax deductible.
 
In 2017, of the $68.99 billion MPF contributions received, $12.49 billion were voluntary contributions, of which $8.89 billion were made by employers and $3.60 billion by scheme members.
 
Under the MPF legislation, benefits arising from mandatory and voluntary contributions are subject to different restrictions with regard to their withdrawal. Benefits arising from mandatory contributions can only be withdrawn under specified conditions¹. Withdrawal of benefits arising voluntary contributions is subject to the governing rules of the respective MPF schemes.
 
－Ends－
 
28 February 2018