Hong Kong will cut tax on liquor with an import price of over HK$200 to boost tourism and consumption of high-end food and beverages, the city’s leader has announced in the 2024 Policy Address.
The existing 100 per cent tax on the import price of liquor with an alcoholic strength of more than 30 per cent will be slashed for the most expensive brands, Chief Executive John Lee said on Wednesday when he presented the annual address to the legislature.
The duty on liquor with an import price of over HK$200 will be reduced from 100 per cent to 10 per cent for the portion above HK$200, starting on Wednesday. But the rate for the portion of HK$200 and below, as well as liquor with an import price of HK$200 or below, will remain unchanged.
A source from the Commerce and Economic Development Bureau told HKFP that the new tax rate means that the more expensive the liquor, the more tax reduction it would enjoy.
But taking into account that most imported liquor was priced below HK$200, the bureau anticipated that 85 per cent of it would see an unchanged tax rate.
“The new tax rate is a balance between promoting trade of liquor and maintaining the health of the general public, ” the source said in Cantonese.
The move was aimed at promoting the liquor trade and boosting the development of high value-added industries, including logistics and storage, tourism and high-end food and beverage consumption, the Hong Kong leader said.
Wholesale and sales sector lawmaker Peter Shih said in early September Hong Kong had one of the highest alcohol duties in Asia. He had suggested lowering the tax from 100 per cent to 20 per cent.
Last week, the Hong Kong Bar & Club Association said 70 per cent of bar owners it surveyed reported a 20 to 30 per cent drop in revenue compared to the pre-pandemic period, while the remainder reported an even larger decline.
The slowdown was caused by Hongkongers heading to mainland China during holidays and the migration wave among wealthy customers, the association said.
Survey respondents had called on the government to cut the duty on hard liquor, and 90 per cent of them also wanted a delay in the planned ban on shisha, also known as hookah or waterpipes. Some 80 per cent suggested extending the MTR’s operating hours.
2024 Policy Address in full:
- Activists urge democracy, free press and enhanced worker rights outside legislature
- Hong Kong cuts tax on premium liquor amid slump in bar business
- Hong Kong expands top talent scheme as city seeks to attract ‘high-calibre talent’
- Multiple-entry visa rules for Cambodia, Laos and Myanmar citizens relaxed
- Hong Kong to phase out subdivided units under 8 sq. metres, but ‘coffin homes’ to stay
- Chief Exec. John Lee urges religious, language and catering support for Muslim visitors
- Hong Kong revives loan concession scheme to support small and medium enterprises
- New HK$5k monthly subsidy for elderly to live in Guangdong care homes
- Loan-to-value ratio for home mortgages to be relaxed amid home price slump
- Young Hongkongers to get better chance of buying subsidised flats
- Gov’t to launch online emotional support platform for young people after spate of suicides
- Gov’t to test locally trained GenAI for document processing
- Concern group ‘disappointed’ with subdivided flat phase-out, urges rehousing plan
- SMEs should reform and improve, leader John Lee says amid a wave of biz closures
- Gov’t to test locally trained GenAI for document processing
- Hong Kong’s third medical school to be built in Northern Metropolis
- Chief Exec. John Lee says democratic reform is ‘settled’ and ‘not an issue’
