Hong Kong Trade and Economic Development Bureau: No plans at this stage to further adjust the liquor tax.

Dr. Edward Yau, Director of the Hong Kong Business and Economic Development Bureau, stated on July 23 during a Legislative Council meeting that when the Hong Kong government implementing measures, it has taken into consideration various policy considerations such as promoting economic development, maintaining public financial stability, and ensuring public health. The Bureau will closely monitor the development of the liquor trade and review the effectiveness of the measures in a timely manner. Any further adjustments will need to carefully consider the impact from all aspects and be deliberated in the long term. At present, there are no plans for the Hong Kong government to further adjust liquor taxes. Dr. Yau explained that currently, liquor taxes in Hong Kong apply to liquor for local sales or other purposes, while liquors exported or transshipped through Hong Kong to other regions are not subject to liquor taxes. Therefore, the measure of lowering liquor tax rates has a more direct impact on imported liquors for local use, while liquor transshipment trade is more affected by global economic conditions and geopolitical factors. According to statistics provided by Hong Kong Customs, from the eight and a half months since the reduction of high-end liquor tax rates on October 16 last year until the end of June this year, the volume (measured in liters) and value of imported and already taxed liquors have increased compared to the eight and a half months before the tax reduction. The volume of liquor imports increased by over 20%, while the value increased by nearly 90%, indicating that the government's introduction of a dual tax system effectively encourages high-priced liquor trade. As the measure of lowering liquor tax rates has been in effect for a short period of time, its effectiveness in various aspects is still to be observed. Regarding some in the industry hoping for further reduction of liquor taxes, the Bureau reiterated that the purpose of lowering liquor taxes is to encourage the industry to conduct trade auctions of high-value liquors in Hong Kong, thereby driving the development of high-value-added industries such as logistics and warehousing, tourism, and high-end gastronomy. At the same time, caution should be exercised to avoid an increase in liquor consumption by citizens due to the lower liquor taxes, which could lead to other issues.