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Hong Kong Rejects Entry Tax For Mainland Visitors

by Mary Swire, Lowtax.net, Hong Kong
14 February, 2014

The suggestion by certain lawmakers that this month's Budget should impose an entry tax of up to HKD100 (USD12.90) on visitors arriving in Hong Kong by land from the Mainland was immediately rejected by Hong Kong's Chief Executive Leung Chun-Ying.

Government figures project that the number of tourists visiting Hong Kong will increase to 70m annually by 2017, and to 100m by 2023, which, it was said, would be insupportable for the city. It was estimated, by the two lawmakers, that the entry tax would cut by 10m the number of visitors per year from the Mainland, particularly those not remaining overnight, and therefore also reduce the incidence of parallel importing.

However, it was pointed out by the tourist industry that Hong Kong would be the first country to introduce such a land-entry tax, and that its introduction could badly affect Hong Kong's image worldwide. In addition, Leung pointed out that such a unilateral tax would invite the Mainland to introduce a similar tax on Hong Kong visitors to China.

Despite concerns that Hong Kong does not have the ability to absorb the expected level of Mainland visitors, there would be practical difficulties in enforcing the tax – for example, in identifying those daily visitors from the Mainland who were arriving for work, rather than for other reasons – and Leung himself noted the economic benefits they brought to Hong Kong, for both the tourist and retail industries.

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