Financial Secretary Paul Chan on Friday said the government was very cautious when considering tax reforms and that many factors had to be taken into consideration.

Speaking at a forum organised by the Chinese General Chamber of Commerce, Chan said the government hoped to achieve a fiscal balance in three years, but the SAR would focus more on managing costs than generating revenue.

"In terms of raising taxes, first, we must consider our competitiveness, comparing to our neighbouring regions and the impact on attracting enterprises and investment," he said.

"Second, as society recovers from the pandemic, including small and medium enterprises, big corporations, and even individuals, we have to rebuild our balance sheets. We hope to provide more room for companies and individuals to strengthen their financial abilities."

The government deducted one percent from the recurrent expenditure resources of government departments from the 2024/25 financial year.

The finance minister said the government would look into whether there was a need to further reduce expenditures in his Budget, due to be announced next month.

On whether the "affordable users pay" principle could be further implemented, he said Hong Kong has to work on it in a gradual and orderly way.

Chan added there were currently no plans to cut costs on infrastructure, saying the Northern Metropolis project could not be delayed.