(Bloomberg) -- Hong Kong vowed to narrow its fiscal deficit after announcing the city’s on course for the fourth budget shortfall in five years. 

The shortfall for the financial year ending March 31 is projected at HK$101.6 billion ($13 billion), Financial Secretary Paul Chan said in his budget address on Wednesday. That’s almost double the HK$54.4 billion estimate initially laid out in last year’s speech. Chan expects to shrink the deficit to HK$48.1 billion for the next financial year ending March 2025.

The government will consolidate its public finances and “narrow our fiscal deficit progressively toward achieving the goal of restoring fiscal balance,” Chan told lawmakers.

Falling land sales and a weakened economy have hurt the city’s income, even after the lifting of travel and other curbs which curtailed activity during the pandemic. Revenue from land premiums for this year is set to be HK$19.4 billion, significantly lower than the original estimate by HK$65.6 billion.

Chan announced a range of measures to boost the city’s weak housing market and tourism industry, including roughly HK$1 billion to attract visitors and host major events. The city will also raise the tax rate on high earners, in the first increase in two decades.

A higher tax rate of 16% will apply to income exceeding HK$5 million ($640,000). Previously, tax for all individuals was capped at 15%.

Revenue from land premiums is estimated to be HK$33 billion for 2024-25, increasing by 70.1% over the revised estimate for the current year. To boost the government’s income, Chan raised taxes on tobacco to 70% and brought back a 3% tax on hotel room rates. 

Spending this year is estimated to fall to HK$728 billion, coming down from the HK$810 billion spent when the city was still in pandemic isolation.

Earlier this month, rival financial center Singapore forecast a return to surplus in the fiscal year starting April, as recent tax increases counter increased spending to support individuals and companies. The surplus would be about S$800 million ($595 million), or equivalent to 0.1% of gross domestic product, Finance Minister Lawrence Wong said.

For more on Hong Kong’s Annual Budget Presentation, click here for our TOPLive blog.

(Updates with details on tax hike from 5th paragraph. A previous version corrects language on land premiums revenue estimates)

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