Hong Kong’s leader announced a reduction in liquor taxes on Wednesday as the city aims to restore its image as a travel destination known for its vibrant nightlife and dining options.
After implementing a national security law mandated by Beijing, Chief Executive John Lee is now tackling economic challenges, particularly in competing with cities like Singapore, Japan, and mainland Chinese hubs.
The COVID-19 pandemic has altered residents’ lifestyles, leading many to spend weekends in mainland China, where prices are lower and entertainment options are broader. As a result, local demand has dropped, and visitors from the mainland are also spending less in the city.
Many shops in popular areas remain vacant, and bar revenues were down about 28% in the first half of 2024 compared to the same period in 2019, according to preliminary data.
In his annual policy address, Lee revealed that the tax rate on liquor priced over 200 Hong Kong dollars (about $26) will drop from 100% to 10% for the portion above that price. He hopes this will benefit logistics, tourism, high-end dining, and storage industries. Following the elimination of wine duties in 2008, imports surged by 80%, and many new wine-related businesses emerged.
Lee, who was selected by Beijing to lead Hong Kong, pushed the national security law through in March, prompting concerns that it would limit the civil liberties promised to the city when it returned to Chinese rule in 1997. Since then, many activists have faced prosecution or have gone into exile.
In response to the emigration of middle-class families and young professionals to countries like Britain, Canada, and the U.S., Lee has also updated a residency scheme for wealthy migrants. Starting Wednesday, investments in homes valued at 50 million Hong Kong dollars ($6.4 million) or more can count towards a portion of the residency requirement.
Just before Lee’s announcement, a small group of pro-democracy activists staged a demonstration outside government headquarters, calling for universal suffrage in chief executive elections and a retirement pension scheme. They chanted for a return to democracy and improved living conditions.
