The Hong Kong Government has estimated that the city’s economy will continue to grow for the rest of the year. However, amid uncertainties such as geopolitics, global economic volatility and interest rate trends, it is hoped that the Government will put forth new ideas and more measures in the upcoming Policy Address that will boost economic growth.

Hong Kong’s economy has yet to recover fully. Despite a year-on-year increase in overall exports for three consecutive quarters, changes in consumption patterns of both visitors and residents continue to pose challenges to related industries, impacting many small and medium enterprises.

As the Policy Address approaches, the business community hopes for continued support for SMEs facing operational challenges through measures such as relaunching the Pre-approved Principal Payment Holiday Scheme, strengthening support for Hong Kong businesses, and enhancing Hong Kong’s competitiveness in key industries such as finance, trade and tourism.

Recently, there have been calls for the Government to scrap or slash the tax on spirits to develop Hong Kong into an international spirits trading hub. While some argue that this would cause a reduction in government tax revenue, it could have a positive impact by stimulating consumption and promoting economic growth.

Removing wine duty in 2008 transformed Hong Kong into a regional wine trading hub and a top wine auction centre. From then until 2022, the number of establishments engaging in the import of wholesale alcoholic drinks and specialized stores making retail sales of alcoholic beverages grew exponentially. It created a significant number of jobs and injected new impetus into Hong Kong’s economy. 

Eliminating the tax on spirits would be welcome news for restaurants and bars, some of which have struggled to survive since the Covid-19 pandemic. With Hong Kong actively promoting its mega event economy, including cultural and sports activities, international financial conferences and business exhibitions, it would be beneficial for visitors to unwind and recharge in local restaurants and bars after a busy day of sightseeing or business meetings. Besides enriching tourists’ experiences, it will also boost restaurant receipts, thus benefiting the economy.

To attract businesses, professionals and tourists to Hong Kong, it is important to create a business-friendly environment while meeting their needs for a high quality of life and leisure opportunities. I hope the authorities will introduce additional policy measures aimed at attracting businesses, talent and visitors with a focus on promoting the long-term development of our city and industries.

Jeffrey Lam
jeffrey@jeffreylam.hk