Bid to lower air passenger departure tax squashed

Tourism sector lawmaker Perry Yiu Pak-leung's proposed amendment to cap the air passenger departure tax at HK$160 got rejected by a Legislative Council's Bills Committee.

The government previously announced that, starting October 1, travelers will have to pay HK$200 in air passenger departure tax, up from the current HK$120.

Concerns have risen within the tourism sector, according to Yiu, warning that this increase could damage the city's aviation attractiveness, particularly in the low-cost airline market.

He criticized the substantial increase as contradictory to the government's tourism policies.

"When we aim to attract overnight visitors, you increase hotel room taxes; when we want to draw air travelers, you raise the airport departure tax. This contradiction has always troubled me," Yiu said.

He therefore suggested authorities gradually increasing the tax to HK$160, before going to HK$200 in a later phase.

Democratic Alliance for the Betterment and Progress of Hong Kong lawmaker Ben Chan Han-pan, who is also a member of the Legco's transport panel, favored a one-time increase.

He argued that phasing it in over several years could confuse travelers and create the impression of ongoing tax hikes.

He suggested that it is better to endure short-term pain than to face continuous increases.

Permanent Secretary for Financial Services and the Treasury Andrew Lai Chi-wah emphasized that the government has handled the situation with great care and does not wish to negatively impact travelers.

He noted that the authorities have also incorporated some of Yiu's suggestions by expanding the exemption policy to allow transit passengers departing the next calendar day to be tax-exempt.

The committee then voted on the amendment, with 10 out of 15 members participating, resulting in a tie of 5 to 5.

Committee chairman Michael Lee Chun-keung, after consulting with legal advisors, stated that since the amendment did not receive majority support, it cannot be proposed as an amendment by the Bills Committee.

(Cheng Wong)