Chief Executive John Lee said officials moved to slash the tax on hard liquor because they saw market opportunities similar to the ones that followed after the duty on wine was abolished in 2008. In his Policy Address on Wednesday, the CE said the duty rate for liquor with an import price of more than HK$200 was immediately reduced from 100 percent to 10 percent for the portion above HK$200. This applies to liquor with an alcoholic strength of more than 30 percent while the duty on spirits with an import price of HK$200 or below remains unchanged. Speaking at a press conference, Lee said officials made the decision considering that around 85 percent of hard liquor in the market is priced under HK$200. He said the objective was to boost the trade in high-end liquor and hoped it would have a similar effect to the abolition of wine duties. Lee noted the import and re-export value of red wine last year rose by 375 percent compared to 2007, the year before the product became tax free in Hong Kong. "Over one year after wine duty has been reduced, we saw an increase of about 350 operators of wine, and an increase of about 1,000 jobs. The income for that sector increased by about 35 percent," he told reporters at the press conference on the Policy Address Lee stressed the government isn't encouraging people to drink, saying it has struck a balance between public health and the need to develop the hard liquor market.
