Hong Kong slashes spirits tax to boost trade, tourism
CHINA – Hong Kong has announced a significant reduction in its spirits tax, cutting the rate from 100 percent to 10 percent for bottles priced above HKD 200 (US$25), as part of an effort to stimulate its spirits trade and support related industries.
The new policy was introduced by Chief Executive John Lee during his 2024 Policy Address and takes effect immediately.
The revised tax structure applies to spirits with an import value exceeding HKD 200, with the portion above this threshold now taxed at 10 percent. Bottles priced at or below HKD 200 will continue to face the existing 100 percent tax rate.
The reduction applies to spirits with an alcohol content exceeding 30 percent, with the duty rates applying only to bottles of up to one litre. For larger containers, taxes will be calculated on a “value per litre” basis.
The tax cut follows Hong Kong’s successful strategy of removing tariffs on wine in 2008, which led to a surge in wine-related businesses and imports.
The government is hoping for a similar boost to the spirits industry and related sectors, including logistics, warehousing, tourism, and high-end dining.
A government spokesperson said the move should help generate new business opportunities and create jobs, while balancing public health concerns over excessive drinking.
“Given the experience in waiving wine duty in 2008, a reduction of liquor duty should similarly promote high-end liquor trade, thereby giving impetus to the development of other high value-added sectors such as logistics and storage, tourism as well as high-end food and beverage consumption, creating more job opportunities and bringing overall benefits to society,” the spokesman said.
Hong Kong is already a significant player in the global spirits market, ranking as the 10th largest spirits importer in 2022, with total global imports valued at US$502 million.
In 2023, Hong Kong imported US$395 million worth of brandy and whisky. The new tax policy aims to further strengthen its position as a key hub for the spirits industry.
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