Hong Kong’s chief executive, John Lee, announced during the latest policy address that China’s special administrative region that enjoys a certain level of autonomy has drastically cut its import tax on high-end alcoholic beverages from 100% to 10% as part of a drive to spur the economic growth.
In mainland China, the import duty on premium liquor is between 15% and 25%.
Hong Kong’s newly announced reduced import taxes pertain to high-end beverages that contain over 30% alcohol and are priced above $26 per unit.
This decision follows the recent imposition of anti-dumping duties by the Chinese government, which can reach as high as 39% on brandy imports from the European Union (EU), a response to tariffs that the EU has placed on Chinese electric vehicles.
Lee indicated that the import tax cut is intended to boost the liquor industry, stimulate tourism, and support the growth of sectors such as logistics and storage, as part of a comprehensive initiative to “strengthen the economy and elevate the quality of life for citizens.”
In 2007, Hong Kong implemented a similar strategy by reducing the 80% duty on wine by half, ultimately eliminating it entirely the following year. This decision led to Hong Kong being recognized as “the heart of Asia’s wine trade” and established it as one of the largest wine auction hubs globally.
According to government reports released earlier this month, Hong Kong’s economy experienced a growth of 3.3% in the second quarter of 2024 compared to the previous year. The region’s real GDP is projected to rise between 2.5% and 3.5% this year, following a growth rate of 3.2% in 2023.
The region’s 100% tax on spirits ranked among the highest globally. The Southeast Asian nation of Laos is noted as one of the few countries with an even steeper tax on spirits, set at 110%, according to Oxford Economics research.
