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Hong Kong stamp duty

Comment on stamp duty rise 'a mistake'

PUBLISHED : Thursday, 07 June, 2007, 12:00am
UPDATED : Thursday, 07 May, 2015, 12:48pm

Some government officials may have made a mistake by commenting on the stamp duty rise before the release of the new policy, a senior mainland central banker suggested yesterday.

The Ministry of Finance last week tripled the stamp duty on stock transactions in a move to curb the market rally. That came just a few days after another official denied an increase was in the offing.

'The central government has strict rules and procedures in releasing important information, and no officials will be allowed to talk about it prior to its release. That has been strictly followed for years,' People's Bank of China deputy governor Wu Xiaoling said of the stamp duty rise.

'Maybe someone was not aware of the policy but it was definitely not the government's intention.'

That was the first time a senior government official commented on the stamp duty increase, which triggered a sell-off in the stock market the next day. Ms Wu, at the sidelines of the China International Private Equity Forum, later asked that her remarks not to be seen as relating to any specific event.

The stamp duty has been widely criticised by retail investors upset by contradictory remarks earlier as well as the timing of the announcement.

The Shanghai Composite Index, which had risen more than 50 per cent in the first five months, has fallen 12.89 per cent from its record high on May 29.

Some officials at the Ministry of Finance and State Administration of Taxation said they 'haven't heard or received any notices on increasing stamp duty', the official Shanghai Securities News reported on May 23.

'People were angry and questioned the way the stamp duty increase was issued. It had been officially denied several days before it was actually imposed at midnight,' said Xu Ming, an analyst at Huaxin Securities.

Additional reporting by Nevin Nie