The jewellery industry believes the introduction of a goods and services tax could halve its business.
Hong Kong Jewellers' and Goldsmiths' Association chairman Leung Sik-wah said yesterday regional competitors were now looking to usurp Hong Kong's position as Asia's prime market.
'People come to Hong Kong to buy jewellery because we have no GST. But they might think otherwise if the tax is introduced,' he said after the opening of the Hong Kong Jewellery and Watch Fair.
He said the introduction of a GST, proposed by the government in a public consultation launched in July, would reduce his business by at least 50 per cent.
Liberal Party legislator Vincent Fang Kang said the Coalition Against Sales Tax, which he chairs, would canvass exhibitors and buyers at the fair, and hold a forum on the proposed levy on Friday.
He said imports of valuable metals and jewels were worth about HK$18 billion last year, and if the GST was set at 5 per cent, the industry would incur a HK$900 million tax burden.