At a time when the British government are talking about increasing the duty on wine at the next budget to reduce middle class drinking, it is interesting to note that Hong Kong has scrapped duty on wine and beer altogether. Formerly at 80% it was reduced to 40% last year and scrapped on 27th February 2007. The Hong Kong government has a projected surplus of HK$100 billion for 2007/08 and duty on wine accounts for just 0.0015% of total income. We can but dream of such a situation in the UK but the relocation of Tom Stopford Sackville to Hong Kong on the 1st March would appear to be well timed!
Financial Secretary John Tsang Chun-wah on Wednesday announced he would exempt wine and beer from tax duties immediately.
Announcing the measures in his maiden budget in the Legislative Council on Wednesday, Mr Tsang said: “I propose to exempt the duties on wine, beer and all other alcoholic beverages except spirits with immediate effect, and remove the related administrative controls upon amendment of the relevant legislation, so as to facilitate the import, export and storage of these alcoholic beverages.” The proposal would cost the government about HK$560 million a year.
Mr Tsang said the wine business was lucrative and exemption of duties would benefit Hong Kong.
“According to industry estimates, total spending on table wine in the Asian economies excluding Japan is around HK$55 billion, which accounts for about 7 per cent of the global market,” he said. “Hong Kong’s advantageous geographical location, advanced transport and logistics infrastructure and rich experience in international promotion are favourable to the development of trading, storage and distribution of quality table wine.”
He noted that many wine trading and distribution companies in London were owned by Hong Kong companies.
“It is expected that by developing the various businesses in Hong Kong relating to quality table wine, our total business volume in trading, storage and auction of table wine may increase by as much as HK$4 billion.
“In the long run, this will help the developments in industries such as catering services, tourism, brand promotion and exhibitions, table wine appreciation and related educational activities, and can achieve synergy with table wine trading and create new jobs,” he said. South China Morning Post