Three prominent industry groups in Hong Kong are urging the government to reduce the liquor tax rate from the current 100 per cent to 20 per cent in an effort to stimulate the city’s economy. The Hong Kong General Chamber of Wine and Spirits, the Hong Kong and Kowloon Provisions, Wine and Spirit Dealers’ Association, and the Hong Kong Food Drink and Grocery Association have jointly called for the tax cut ahead of Chief Executive John Lee Ka-chiu’s upcoming policy address.

Currently, Hong Kong imposes a 100 per cent tax on liquor with an alcohol content of more than 30 per cent. By comparison, the city adopted a zero duty on wines in 2008, which helped position Hong Kong as a major wine hub in Asia.

Jojo So Yau-Ping, founding president of the Hong Kong General Chamber of Wine and Spirits, advocated for a reduction to 20 per cent, suggesting the government review the impact of the new rate after two to three years. The move is seen as a response to declining sales in the spirits sector, which has been impacted by the city’s economic slowdown.

In July, two major political parties also appealed to the government to adjust or scrap the current spirits tax, reinforcing the call from industry representatives like Peter Shiu Ka-fai, the sector’s representative in the legislature. The proposal aims to create a more competitive environment for Hong Kong’s liquor industry and drive economic growth by encouraging more trade and consumption in the sector.

With the city looking for ways to reignite economic momentum, the liquor tax reduction is seen as a potential avenue for revitalizing a key sector and attracting more international trade and investment.