Does Hong Kong’s new spirits tax cut go far enough?

Published 2024년 10월 21일

Tridge summary

Hong Kong Chief Executive John Lee Ka-chiu has announced a major reduction in the spirits tax, lowering it from 100% to 10% for alcohol with an import price over HK$200. This tax cut is designed to benefit high-end spirits, as the reduced duty applies only to the portion of the bottle price above HK$200, while those priced at HK$200 or below remain taxed at 100%. Critics suggest that the benefits will mainly be seen for bottles priced at least HK$400. The initiative aims to enhance Hong Kong's status as a trading hub, akin to the 2008 tax removal on wine and beer, which significantly boosted wine imports. The government expects a sales surge to counterbalance the projected HK$200 million loss in tax revenue. Auction houses like Sotheby’s and Christie’s welcome the move as it could facilitate the acquisition of rare spirits and invigorate Hong Kong's on-trade market.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The Hong Kong Chief Executive’s decision to slash spirits taxes was much applauded last week, but as the dust settles, critics question how big an impact the duty cut will really have on consumers. Chief Executive John Lee Ka-chiu announced a cut to Hong Kong’s spirits tax in his policy address last Wednesday (16 October). Until now Kong Kong has had one of the highest spirits duties of any territory in the world, as drinks with an ABV of 30% or higher are currently taxed at 100%. Lee has been praised for what is being dubbed a landmark duty change for spirits, with the rate slashed to 10% for alcohol with an import price of HK$200 and above. However, not everyone sees the new move as a positive, and South China Morning Post has published an opinion piece criticising the new move. Under the new system, a duty rate of 10% will apply only to the portion of the bottle price over HK$200. Duty of 100% will still be paid on the first HK$200 of the import price. Products at HK$200 or ...

Source: Thedrinkbusiness