Opinion | Soaring rent risks the city's status as shopper's paradise
It's cheaper to pay 12pc sales tax and buy a pair of jeans in Manila than get them here tax-free
Hong Kong will continue to lose its competitiveness relative to other Asian cities even if it doesn't impose a tax on goods and services.
Why is this city losing its lustre if consumers aren't burdened by the sales tax in place in other places in Asia? The answer is obvious: the sky-high cost of renting shop space here.
The operator of a Japanese restaurant in the busy Causeway Bay district explains Hong Kong's worsening problem.
"For every HK$10 of sales my restaurant makes here, HK$6 goes to the landlord. But in Tokyo, rent is the third biggest expense, after food and salaries," he said. "It's getting more and more difficult to operate a business here."
The restaurateur's observation was echoed by a friend from the Philippines and a former journalist, now based outside London, but who visits Hong Kong once every year. This friend shops regularly here because of the choice available, and, more importantly, the absence of a sales tax.
He bought a pair of popular brand name jeans for HK$900 in Hong Kong recently. Later, he found out they are sold for less in Makati, the business district of Manila, even with a 12 per cent value-added tax.