Spirits Tax Reform for A Competitive Spirits Showcase Market in the Region and Spirits Warehousing

On behalf of the European Chamber of Commerce’s Wine & Spirits Business Council (WSBC1), we wish to recommend that the Government review and pursue a more equitable spirits tax and regulatory

environment for Hong Kong in order to remain competitive vis-à-vis its neighbours in the region. A reform of the current system will also enable Hong Kong to become a regional center for the premium spirits industry (including its related activities e.g. auctions), thereby reinvigorating the restaurant, bar and entrainment scene, and revitalizing Hong Kong’s tourism offer.

WSBC is also committed to reducing harmful drinking and advancing a balanced and inclusive regulatory and taxation environment that supports sustainable business growth, while cementing Hong Kong’s position as a leading business and travel destination. WSBC’s members strongly support the introduction of a Legal Purchasing Age in Hong Kong with the purpose of tackling underage drinking. We are also committed to playing a part in supporting the management and recycling of waste glass bottles in Hong Kong, through the Producers Responsibility Scheme on glass bottles, proposed at HK$1/Litre bottle (subject to further implementation details). As regional competition intensifies, we look forward to contributing to and supporting a range of reforms that benefit Hong Kong citizens and the broader economy.

Issues and Recommendations for Policy Address

1. Spirits Tax Reform for A Competitive Spirits Showcase Market in the Region – To review the 24- year-old spirits tax system which taxes alcohol based on value; and to introduce a specific tax system based on alcohol content. WSBC is proposing a rate around HK$75/Litre of pure alcohol (LPA), as a balanced approach for all stakeholders, for consideration.

2. Spirits Warehousing – To review and reassess the dangerous goods license requirement for the storage of potable spirits with more than 30% alcohol by volume (abv) in the Dangerous Goods Ordinance. The review should take into account the internationally accepted practices.

The Paper:

WSBC-Position-Paper-October-2018_Spirit-Tax-Reform-and-Warehousing