HONG KONG: In a written reply to a question in the Legislative Council on November 23, Hong Kong’s Secretary for Security, Lai Tung-kwok, stated that “the Government has no plan to impose a tax or other fees on same-day round-trip visitors travelling by land” from Mainland China.
In April last year, the Chinese authorities decided to stop the issuance of one-year multiple-entry individual visit endorsements and, instead, began to operate a “one trip per week” endorsement for Chinese nationals in an effort to curtail parallel trading activity.
Increasing numbers of parallel traders were taking advantage of the multiple-entry visa policy to buy stock tax-free in Hong Kong to resell on the Mainland at a profit. They were purchasing supplies in Hong Kong, which does not charge a sales tax, and taking them across the border to the Mainland in small quantities to avoid paying import duties.
It has recently been suggested by lawmakers that, in order to raise the cost of parallel trading activities, the Government should levy a same-day land departure tax on visitors who depart by land within 24 hours after entry. Where the number of same-day departures made by a visitor exceeds a certain number within a certain period of time (e.g. the past six months), the tax payable would increase.
Lai pointed out that, during 2002 and 2003, the Government had a plan to impose a boundary facilities improvement tax on passengers leaving Hong Kong via land or sea departure points as a measure to raise revenue, but the plan was shelved.
He also noted that, since the implementation of the “one trip per week” measure, the number of same-day visitors from the Mainland has shown a downward trend. He confirmed therefore that the Government has no current plan to impose a departure tax, but that the relevant government departments “will continue to closely monitor the situation and take various existing [enforcement] measures to crack down on parallel trading activities.”
