HK Policy Address 2024: Liquor tax cut promotes trade, not drinking, commerce chief says
Hong Kong Free Press
Hong Kong’s liquor tax cut will promote the trade of high-end spirits rather than drinking, the city’s commerce chief has said, as he played down the policy’s impact on residents’ health.
Chief Executive John Lee on Wednesday announced a tax cut on spirits with over 30 per cent alcohol content and an import price above HK$200 as he delivered his third Policy Address. Lee said the move was not designed to promote drinking and it would boost the premier liquor market.
The move raised concerns from the city’s medical sector over a perceived promotion of alcohol consumption. A petition opposing the move was signed by 133 people, including lawmaker David Lam, ex-health chief Sophia Chan, and University of Hong Kong medicine head Lau Chak-sing.
Speaking on a Commercial Radio programme on Friday, Secretary for Commerce and Economic Development Algernon Yau said the medical sector had realised the impact of the tax cut on health would not be “as great as expected,” because of its two-layer design.
While the duty on liquor with an import price of over HK$200 was reduced from 100 per cent to 10 per cent, the tax for liquor coming into Hong Kong costing HK$200 or below remained unchanged, according to the Policy Address.
85 per cent of the alcohol in the market would not be affected, Lee said on Wednesday.
“Many [people from] the medical sector were concerned that the tax cut would be a general slash on both cheap and expensive spirits,” Yau said in Cantonese on Friday. “They were concerned whether the cheaper price would promote drinking.”
“The government had to strike a balance, and we thought the two-layer tax cut could do so… It lessened the medical sector’s concerns over promoting alcoholism, but it will hopefully boost the high-end spirit trade,” he said.
Yau added the policy was supported by health chief Lo Chung-mau.
He also said the government’s tax cut on wine in 2008 had led to the value of wine trading in the city increasing 3.7 times, whereas imports only rose by 33 per cent.
The development of high-end wine trading had benefited supply chain sectors, he said, adding that about 800 companies and 1,000 jobs were created after the 2008 exercise.
He said the liquor tax cut this time was also designed to boost trade and not retail in bars.
The government will monitor the impact of the policy and make adjustment accordingly, he said.
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