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Spirits tax cuts planned to revive Hong Kong nightlife
Hong Kong is planning to lower the amount of tax it levies on spirits, as the financial hub seeks to regain its edge as a ‘premier destination’ for nightlife.
The Hong Kong government currently imposes a 100% tax on spirits with more than 30% alcohol content, equivalent to its value. Plans to reduce this tax – which is among the highest of anywhere in the world – are expected in chief executive John Lee’s upcoming policy speech in mid-October.
It is predicted that a tiered system will be introduced to encourage the purchase of premium spirits while moderating consumption of cheaper options, in a bid to also limit health risks.
This strategy is based on a successful precedent from 2008 when the government removed taxes on non-spirits liquor, including wine and beer, leading to increased industry revenue and business growth in related sectors.
Earlier this summer, politicians called for Lee to lift or adjust the spirits tax ahead of his policy address to reinforce Hong Kong as not only a hub for wine and beer, but also spirits.
“Since we cancelled the wine tax in 2008, Hong Kong has become one of the leading centres in the world for the auctioning and trading of wine,” said Dominic Lee Tsz-king of the New People’s Party. “We think if we adjust our spirits tax, we will have the same effect and it will allow Hong Kong to become an international auction and trading centre for spirits.”
If implemented, the proposed plan would mark Hong Kong’s latest effort to revive its nightlife industry, which has been struggling since the Covid-19 lockdowns.
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