Hong Kong won’t impose departure tax, says finance chief
HONG Kong Financial Secretary Paul Chan said he has no plans to impose a departure tax on residents, rejecting a proposal aimed at easing the government’s widening deficit.
“I don’t think it’s something good for Hong Kong,” said in an interview with Bloomberg TV at the World Economic Forum in Davos on Wednesday (Jan 17).
The pro-business Liberal Party made the proposal last week. Hong Kong residents are travelling to neighbouring Shenzhen and other mainland cities in record numbers to shop and dine, sparking concern from the local retail and service sectors.
Hong Kong leader John Lee previously said the government welcomes more cross-border travel but didn’t directly comment on the proposal when asked by reporters.
Chan is set to announce his budget for the 2024-2025 financial year next month. He’s tasked with reviving a stagnant economy hurt by weak demand in China and geopolitical tensions. He warned in December that the city could face a deficit of more than HK$100 billion (S$17.1 billion) for the current year, double the HK$54.4 billion he initially forecast.
Hong Kong has struggled to regain its appeal as a global travel destination since the city reopened in March last year from its self-imposed Covid isolation.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Visitor numbers have risen but still trail pandemic levels. Visitor arrivals from mainland China – the biggest source of tourism – are about one-third lower than before the pandemic. China’s economic slump and weak currency are also weighing on consumption in Hong Kong.
Latest official data shows a stagnant retail sales recovery in Hong Kong, which peaked in April at 88 per cent of the 2018 level and was at 87 per cent in November. A fragile recovery of growth in China and a downturn in Hong Kong’s property market were major drags.
Chan said in the interview he expected Hong Kong’s economy to improve this year on expected cuts in interest rates and a stabilising Chinese economy. His government will keep the local real estate market “healthy” and its development in line with economic growth, he said.
Chan left for Davos on Sunday night to attend the annual week-long World Economic Forum meeting. He has met with political and business leaders in a bid to drum up tourism and attract more global capital to the financial hub. BLOOMBERG
Share with us your feedback on BT's products and services
