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reprinted from:
Departure tax could be a blessing for struggling retailers
By Enoch
Yiu Hong Kong shops and restaurants stand to benefit from a departure tax to be introduced next year, which could discourage SAR residents from taking shopping day trips to the mainland. The new border levy, expected to be HK$ 18, is intended to help plug the government's bloated budget deficit but should help struggling Hong Kong retailers, according to the China and Hong Kong Economic and Trade Association chairman Eddy Li Sau-hang. "The new departure tax does not require travellers to pay too much money, but still, it will add cost for those who go to China for cheaper meals and shopping," he said. "This may help to encourage more to stay in the SAR to shop and dine, and it is good news for the local retailers." SAR travel agents are selling day trips to China that include transport charges and a meal for as little as HK$ 48. Many economists have argued that Hong Kong's deflation largely stems from domestic retailers being forced to cut prices to match those offered across the border. Legislation enabling the new tax is expected to be presented in the next three to four months, according to the Permanent Secretary for Financial Services and the Treasury Alan Lai. Travellers departing Hong Kong by air pay a HK$ 100 airport tax while those departing by sea must stump up HK$ 18. Both levies are charged on the tickets. An HK$ 18 a trip levy would bring the government an estimated HK$ 1 billion a year, a small fraction of a deficit estimated to hit HK$ 60 billion this financial year. Hong Kong Society of Accountants taxation committee chairman Tim Lui Tim-leung said the government had intended to intoduce the tax in 2004 but legislators were likely to be asked to approve a change early next year for introduction by mid-year. "It seems the public is reacting positively to the proposed land departure tax so it would not be a big problem for it to be brought in earlier," Mr Lui said. Deciding who should be exempted had yet to be resolved. Children making cross -border trips to attend schools were likely beneficiaries, while truck drivers who made daily border crossings would probably face a monthly tariff, he said. Democratic Alliance For the Betterment of Hong Kong economic affairs spokesman Chan Kam-lam said the party supported the new tax and agreed with a government proposal that it should be added to train or bus tickets. However, he said the party would only vote
for the bill if the government used part of the proceeds to improve border
crossing facilities to speed the flow of people into the mainland. |
