Duty of authorities to help support Hong Kong tourism
- Mainland China tax on items bought in city puts people off from visiting and should be amended
Growing the tourism pie is a common recovery strategy for many Covid-battered economies. Hong Kong and mainland China are in the same boat in this respect as both reopened late in an increasingly competitive global environment.
In addition to enhancing attractions and experiences for visitors, the authorities should also strive to remove hurdles and disincentives.
It is good to hear that Beijing is prepared to raise the HK$5,000 (US$639) duty-free allowance for mainland citizens. A series of preferential policies may also be introduced to support Hong Kong tourism, as long as the city can show it has the capacity to handle an expected surge in visitors under an expanding solo travel scheme.
Unlike Hong Kong travellers whose overseas shopping is generally not taxed upon return, mainland tourists are subject to customs duty back home for goods exceeding 5,000 yuan (HK$5,430 or US$695). This is in stark contrast to the annual 100,000 yuan allowance for purchases on the island province of Hainan, the country’s new shoppers’ paradise.
It does not take a travel expert to tell where tourists will go for tax-free shopping. Hainan authorities announced that the island recorded duty-free sales of 7.4 billion yuan generated by 938,000 trips by shoppers during the Lunar New Year period.
Separately, Shenzhen has tapped into the trend of more Hongkongers going north for dining and entertainment by rolling out additional tax refund measures.
The city’s appeal as a shopping destination has been further undermined in the wake of social media posts by cross-border travellers lamenting taxes on their buys when they return home. The threshold, which has not been adjusted for 28 years, does not square with the growing consumption power of mainland tourists.
Beijing ‘considering’ raising Hong Kong’s duty-free allowance for mainlanders
The changing travel patterns make timely policy adjustments a must rather than a maybe. Even though more tourists are coming here for unique experiences rather than quality and bargain shopping these days, a low duty-free allowance is hardly conducive to a tourist-friendly environment.
Authorities on both sides of the border should strive to remove barriers and disincentives to help make life easier for travellers.
