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  • Dec 29, 2014
  • Updated: 2:00am
Chinese tourists
NewsHong Kong

An arrivals tax would hit locals too, says CY Leung

Government can't tax mainlanders without taxing Hongkongers, says chief executive as he rebuffs plan to charge mainlanders an entry fee

PUBLISHED : Tuesday, 11 February, 2014, 6:55pm
UPDATED : Wednesday, 12 February, 2014, 11:27am

Imposing a tax on non-Hongkongers arriving by land could prompt a tit-for-tat move by mainland authorities, Leung Chun-ying warned yesterday.

The chief executive also said the proposal, floated by politicians as a way of curbing the influx of mainland tourists, was not feasible as the government could not tax non-locals without taxing returning Hongkongers, too. He did not elaborate.

However, a member of a government committee studying population policy argued a tax could be a "smart move".

"Mainlanders and foreign visitors coming to Hong Kong have offered a bracing effect to Hong Kong's tourism and economy," Leung said.

"They have created massive job opportunities. This is why we should not be conceited before getting rich."

The idea of an arrivals tax of HK$20 to HK$100 on non-locals who enter the city by land was proposed by Democratic Party lawmaker Sin Chung-kai and two People Power lawmakers. They raised it in response to a government forecast that the city would receive 70 million visitors a year within three years.

Yesterday Leung pledged to boost the city's capacity to accommodate travellers.

Professor Paul Yip Siu-fai, a University of Hong Kong demographics expert and member of the steering committee on population policy, said the idea of a tax was worth considering until the government had increased the city's capacity.

He said it would be a "smart move" as it would help regulate the flow of day-trip visitors from the mainland - 23 million a year, Tourism Board figures show.

"We need special measures at special times," he said, "It is not a discriminatory move. It is just … to reduce their impact on the daily life of residents."

People Power lawmaker Raymond Chan Chi-chuen criticised Leung for snubbing his proposal without much discussion.

"Leung owes Hong Kong people an apology for saying that they should not be proud before getting rich," Chan said

Democratic Party lawmaker Albert Ho Chun-yan also said that Leung's remark was an "insult to Hongkongers" because the tax suggestion had nothing to do with their being proud.

Frank Pak Fu-hung, founder of bird's nest retailer Home of Swallows, worried that local retailers would be badly hit by the tax, as mainland visitors' spending accounted for about 60 to 70 percent of their sales revenue.

Additional reporting by Tanna Chong



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This article is now closed to comments

Leung's response doesn't pass the laugh test. There are separate immigration counters for residents and visitors -- how hard can it possibly be to target a tax toward the latter?
China should abandon the tax on luxury goods, ensure an adequate supply of milk powder, construct mega casinos, ban the overseas purchase of jewellery items over RMB 2000 per head & restrict visits to HKG + Macau to those with business permits with tourists allowed 2 trips per year.
Then let's see what happens to the HKG & Macau Black Money property, gambling & jewellery Laundromats.
What's the maximum legal amount of currency a Mainlander can remove from the country for an overseas trip?
The current government seems fail to address the social problems that were brought by the less-wealthy mainlanders (e.g. traffic congestion, smuggling of milk powder, shortage of hotel supply, etc) that makes a significant portion of the incoming visitation but are not the target visitors of HK as they make little contribution to HK. His promise on solving the problems, such as improving the infrastructure, to me seems to be empty words and his advice that HongKongers should be more tolerant to the problems seems to be over-demanding when there is an easy short-term solution (i.e. arrival tax) to alleviate the problem. Of course, in the long term the tax can be scrapped.
I consider the tax should not be heavy - a symbolic tax of $100 should have served the purpose. It should be applied to all travelers around the world to avoid discrimination. The overseas travelers who are going to spend the holiday in HK are not going to be deterred by this token tax as it is just a fraction to their spending in HK. Yet, it will have a considerable psychological impact to the frequent mainland visitors.
CY is not witnessing the coaches parking in front of their home and causing severe traffic congestion everyday and he is not seeing the mainland visitors spitting and urinating in his neighborhood everyday. I would like to see the home of CY to be opened to the mainland visitors everyday and I would like CY to demonstrate to us how he is tolerant to these problems.
If this is too ‘difficult’ for the SAR government to figure out how to do it than there is no future for the HKSAR as this is an ‘easy’ problem compared to the other economic, social, and political problems that Hong Kong faces. Many localities have a tourism impact tax to compensate for wear-and-tear on roads, electrical grids, public transportation, etc. Rather than describing it is an ‘arrival tax’ it should have been described as an ‘impact tax.’ One very easy approach that would deal with tours (but not IVS visitors) to levy HK and mainland tourism agencies to collect and provide to the SAR government. It is the HKSAR government policy to double mainland tourism to 100 million annually how does it plan to pay for it – with existing SAR surpluses? Impact fees make sense. They already charge airport arrival taxes I believe so a land crossing isn’t ‘something’ new albeit politically sensitive for CY given his bosses.
My friend is a HKer who works in HK but resides in Shenzhen to take advantage of the lower rent. If mainland retaliates with RMB 100 per entry, then . . . . . woo ... woo ..
great post , spot on
that is absolutely their intention , even attempting to make us speak their language and indoctrinate our children
will their ever be a CE that will fight for hong kong again? I think Tung Chee Wah is sorely missed
he wasted no time pulling out the old tired MERCHANT argument, so lame
yes , please worry about the ten or twelve merchants that will only make 50 million instead of a 100 million
forget about the other 8 million inhabitants of hkg
sudo rm -f cy
Retaliatory tax or none, I have no interest in visiting PRChina anyway.
Don't be discriminatory then, tax locals, because when locals go on trips, we actually go on trips and not there to profitier.
We also don't **** all over the place, use the tax to pay for the cleanup
Even supposing it were unfeasible to impose a tax on non-locals without taxing returning Hong Kongers--which is entirely untrue--there would be no big issue since Hong Kongers could afford such a tax whereas the real targets, the non-local mainlanders, could not. Therefore, it would serve to discourage and reduce the number of incoming tourists.

A some astute commenters have noted, returning Hong Kongers would pass through e-channel or otherwise use their HKID cards. The tax would be charged on anyone who does not hold an HKID card. How unfeasible is that?



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