Doors start to open for potential ventures

Wallis Wang

Multiple foreign chambers of commerce have shown interest in the Hong Kong market after the liquor tax for high-end spirits was slashed, says Secretary for Commerce and Economic Development Algernon Yau Ying-wah.

In a policy briefing to the Legislative Council's panel on commerce, industry, innovation and technology yesterday, Yau said the administration will cater to market needs and further promote the city's liquor market to overseas business chambers through Hong Kong's Economic and Trade Offices.

"With the reduction of the liquor tax, we hope to build Hong Kong as a hub for liquor trade and push the development of various sectors, including storage, logistics and high value-added catering services," Yau said.

"Many foreign chambers of commerce have expressed interest in the policy change and begun consulting authorities.

"We will cater to the industry's demands and offer sufficient information for them."

The duty rate for liquor with an import price of over HK$200 has been cut from 100 percent to 10 percent for the portion above HK$200, while the duty rate for the portion of HK$200 and below remains unchanged, Chief Executive John Lee Ka-chiu announced during his policy address on October 16.

Yau said the administration made reference to the experience of exempting wine duty when making the decision, believing the move will help Hong Kong become a liquor trade center.

New People's Party lawmaker Dominic Lee Tsz-king proposed introducing international spirits auctions to establish Hong Kong as a liquor transaction hub.

The authorities should also establish designated warehouses for spirits and supporting logistics facilities, he added.

Industrial sector lawmaker Jimmy Ng Wing-ka said liquor transactions involve a significant amount of cash and urged the administration to develop a liquor economy and help the sector liaise with insurance companies.

Ng questioned how the 14 trade offices around the world will attract foreign businesses to visit the city for liquor-related business activities, including auctions, trades, distribution and storage.

In response, Yau said the trade offices have received inquiries about the reduced duty rate, adding that they have been briefed about the policy address.

He said trade office staff will return to Hong Kong for a duty report next month and offer relevant information to lawmakers.

The US Congress last month passed an act that grants the government the power to close down Hong Kong's three trade offices in Washington, New York and San Francisco.

Yau said the work of the trade offices is of great importance, and the city will find ways to connect and promote Hong Kong if they are forced to shut down.

Meanwhile, wholesale and retail sector lawmaker Peter Shiu Ka-fai proposed that the administration implement Muslim-friendly policies as 90 percent of countries participating in the Belt and Road Initiative are Muslim.

Yau said authorities will communicate with the business and tourism sectors to meet the demands of tourists from Islamic cultures.

Some hotels are already providing prayer rooms and more halal restaurants are opening up, indicating that local merchants have observed the business opportunities brought by Muslim customers, he added.

wallis.wang@singtaonewscorp.com