Promote Research and Development
100. Over the past few years, we have been dedicated to promoting R&D but it takes time to deliver results. These efforts are gradually bearing fruits with a rising gross domestic expenditure on R&D activities in recent years, boosting our confidence in promoting R&D.
101. Amendments were made to the Inland Revenue Ordinance in late 2018 to provide for enhanced tax reduction for qualifying R&D expenditure so as to encourage enterprises to devote resources to local R&D. The total amount of R&D expenditure for which claims for tax deduction were made in the first year of assessment has more than doubled since the implementation of this measure. Seventy per cent of this amount enjoyed enhanced tax deduction. The measure has delivered notable results.
102. Since permission was granted for the remittance of Mainland R&D funding to Hong Kong, the State Ministry of Science and Technology, Guangdong Provincial Government and Shenzhen Municipal Government in the past two years have approved over RMB 340 million for universities and research institutes in Hong Kong to conduct R&D or set up laboratories, thereby adding impetus for local R&D activities.
103. The "InnoHK Research Clusters" is our flagship project. It comprises Health@InnoHK on healthcare technologies and AIR@InnoHK on artificial intelligence and robotics technologies, and has attracted many top-notch universities and research institutions in the world. The first batch of about 20 R&D laboratories will commence operation progressively in the first quarter of this year. This will further consolidate Hong Kong's position as a global research collaboration hub.
104. Funding under the Innovation and Technology Fund (ITF) increased by over seven times in the last seven years. I will inject $4,750 million per year to the ITF two years in a row to sustain its 17 funding schemes as well as the work of over 50 R&D laboratories in the next three years.
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