Beijing is planning to raise Hong Kong’s duty-free shopping allowance of 5,000 yuan (US$688) per mainland Chinese tourist, but the amount will be “far below” the 30,000 yuan proposed by industry representatives, government sources have said.
Visitors from across the border currently need to pay a tax of 13 to 50 per cent to the mainland government for purchases made in Hong Kong that exceed 5,000 yuan per trip, a measure introduced in 1996.
Tourism and retail industry insiders have been urging mainland authorities to increase the threshold since the reopening of borders after the pandemic as big-spending visitors were found to be opting for more cultural experiences rather than pure shopping. The city’s currency is also expensive due to its peg to the US dollar.
There were hopes the limit could eventually be in line with Hainan Island’s current 100,000 yuan per year, with an increase to 30,000 yuan in the first phase.
The increase to 30,000 yuan would be parallel with what Hainan got in 2018. Hainan got its first rise in 2018 from 5,000 yuan in place since 2011.
But a source familiar with the matter said Hong Kong’s initial increase would be “far below” 30,000 yuan and even under 20,000 yuan.
Latest numbers from the Census and Statistics Department showed retail sales in April dropped 14.7 per cent year on year, following a 6.9 per cent decrease in March.
Last month, Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, renewed calls for the tax threshold to be increased, saying more visitors to the city might not help much if the duty-free amount remained the same.
She also expected overall sales to decline by a low double-digit percentage this year.