HK competitive despite duty hike

(To watch the full press conference with sign language interpretation, click here.)   Hong Kong will continue to thrive as a financial centre with a competitive stock market and that will not be affected by a stamp duty hike which will take effect in August.   Secretary for Financial Services & the Treasury Christopher Hui made the statement at this afternoon’s press conference on initiatives in the 2021-22 Budget.   The latest Budget proposed to raise the rate of stamp duty on stock transfers from the current 0.1% to 0.13% of the consideration or value of each transaction payable by buyers and sellers respectively.   Mr Hui explained why the move, which aims to increase revenue as the Government is facing the challenge of a fiscal deficit, will not affect Hong Kong’s competitiveness.   “The competitiveness of our market is contingent to a host of factors, and cost, among others, is just one of many. After all, we do compete on quality and also compete on the liquidity of our market, and cost is just one of the many factors. This is the first thing.   “The second thing is if you look at the overall value chain of a stock transaction, stamp duty, which involves the trading part, is just one of the key components.   “In Hong Kong we do not have the withholding tax on dividends. We do not have the capital gains tax. So by and large, some of these tax elements which can be found in other jurisdictions are not found here. So on that front I would say that we are very competitive as a stock market.   “And the third part is, if you look at the speech presented by the Financial Secretary, we have a host of measures to enhance the appeal of our stock market and also our capital market at large.   “At the same time, building on the momentum that we have gathered since 2018, when we introduced the listing reform to bring to Hong Kong a new arena of companies, including new economy companies to come to list, I think the way this market is developing is very promising.   “That is why we are still very confident that Hong Kong’s stock market and also our financial centre will continue to thrive.”
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