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Hong Kong drinks traders expect retail prices of high-end spirits to fall with lower tax

Mixed responses from traders on benefits of slashed alcohol duty and unhappiness among the medical sector, but doctors who are Exco members support move

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Consumers of high-end spirits are generally pleased about the tax cut on high-end spirits, but the response from liquor traders has been mixed. Photo: May Tse

Drinks traders in Hong Kong have said they expect retail prices of high-end spirits to fall after the government slashed the duty on high-alcohol-content liquor with an import price of over HK$200 (US$26).

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Chief Executive John Lee Ka-chiu announced in his policy address on Wednesday that the liquor tax would be reduced on spirits with an alcohol content of more than 30 per cent and with an import price over HK$200.

The first HK$200 in the import price would still carry 100 per cent duty, but the remaining sum would carry a much lower 10 per cent tax.

The duty on spirits with an import price of HK$200 or less would remain at 100 per cent under the new policy.

Government coffers received more than HK$700 million in liquor duties in the past financial year, according to official data.

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Sources said the divisive tax cut, which has drawn ire from some doctors and former health officials, was specifically targeted at the high-end spirits trade, with authorities hoping there would be positive spillover effects on the tourism and restaurant sectors.

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