A top Hong Kong politician has said that if the government proceeds with lowering the city’s spirits tax, Hong Kong will need to step up its promotion of responsible drinking as a mitigating measure. A former health official has referred to the plan as “regressive” for society.
On a Monday radio program, lawmaker Simon Hoey Lee stated that lowering the city’s spirits tax would encourage the expansion of the spirits industry in Hong Kong.
In order to evaluate the tax’s social and economic effects on the community, he also suggested gradually reducing the tax over a three-year period, with reductions of 30% in the first two years and 40% in the third.
However, he also emphasized the need for more public health mitigation measures, claiming that the city’s current initiatives to encourage responsible drinking were not well-publicised.
“A goal exists, but it hasn’t gotten much attention in the past,” Lee said.
“There’s no all-inclusive package or system to remind people to drink responsibly.”
Lee made these remarks as industry associations and political parties pressed the government to change or repeal the city’s current 100% tax on beverages with an alcohol content over 30% in order to strengthen Hong Kong’s position as a hub for the export and trade of spirits.
The Chief Executive made these remarks prior to his policy address on Wednesday.
Lee backed the change in the spirits tax to encourage commerce even though he acknowledged the potential social effects of more alcohol use.
He also mentioned that Hong Kong had a tremendous deal of potential to export Chinese spirits, such as Baijiu.
The rise in Hong Kong’s Baijiu sales over the last five years has reached forty percent. The mainland Baijiu market is valued at 620 billion yuan (US$79.8 billion), with 0.24 percent exported.
Baijiu is in high demand on the global market, according to Lee.
As it is, he said, the spirits tax contributes a pitiful 0.156 percent, or around HK$700 million (US$90 million), to the government’s total tax income.
The member said that he had not seen a “steep rise” in wine consumption after the city’s 2008 repeal of its wine tariff and that tax cuts would make high-quality spirits more affordable, which would aid in driving cheaper, lower-quality spirits out of the market.
“Commerce greatly benefited from wine sales, which fueled the expansion of sectors like commerce, tourism, auctions, sales, marketing, and packaging. Although Hong Kong became a hub for the wine trade, its wine consumption did not rise,” according to Lee.
However, Dr. Regina Ching Cheuk-tuen, an assistant honorary secretary for the Hong Kong Alliance for Advocacy Against Alcohol and a former assistant director of the Department of Health, opposed the reduction of the spirits tax, seeing it as a step backwards for the city and the government.
In terms of public health, this is a step backwards. According to Ching, the World Health Organisation has made it abundantly clear that taxes are a crucial tool for reducing alcohol use.
The physician cautioned that as stronger alcoholic beverages were more reasonably priced, more Hongkongers would drink more spirits, with youths being especially vulnerable.
“In their initial years of employment, young individuals may not earn a substantial salary, but they are willing to explore new opportunities. They would give it a try if the rates are reduced because they can,” Ching said.
