Hong Kong alcohol tax cuts proposed to revive nightlife industry

Hong Kong’s government is planning to lower the rate of tax it levies on alcohol in a bid to revive its nightlife industry.

According to a report shared by Bloomberg, the tax cut is expected to be a key matter in Hong Kong Chief Executive John Lee’s policy address next month. The current levy amounts to a 100% value tax on spirits that carry an alcohol content of more than 30%, and is one of the highest taxes on alcohol in the world.

Bloomberg‘s report states that government officials are considering putting in place a tiered system which would see a lower rate of tax applied to higher-end spirits. Cheaper options would carry higher levels of tax, with the reasoning being that it would encourage people to go to nightlife venues and spend money while discouraging bulk-buying and unhealthy rates of binge-drinking.

Discussions around the changes to the spirit tax aren’t final and may still change, sources told Bloomberg.

Hong Kong’s nightlife industry is still reeling from the hangover of the COVID-19 pandemic as one of the later areas to fully reopen venues following lockdowns. Tight restrictions associated with the pandemic were only loosened in October 2022, and an economy which previously relied heavily on income from the visits of tourists has struggled to recover.

Earlier this year, Hong Kong club Boomerang ranked No. 43 in DJ Mag’s Top 100 Clubs poll.