HK not to levy milk powder export tax

Updated: 2011-02-16 16:14
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HONG KONG - The Hong Kong Special Administrative Region government does not plan to impose a duty on milk powder being taken outside Hong Kong, an official of the government said Wednesday.

Secretary for Food and Health York Chow told legislators that as Hong Kong has been pursuing a free trade policy and is well known for its simple tax system, the government must consider thoroughly various factors to decide whether a duty should be imposed on the export of a certain product.

Such factors include whether it is in line with the free trade policy, the implications on the tax system, and whether the imposition of such tax is the most effective way to stabilize the local supply.

Having taken into account the factors, the government does not consider there is a need to levy a milk powder export tax, Chow said.

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It has been reported that many travelers and "couriers" from the Chinese Mainland buy milk powder in Hong Kong, causing a short supply of as well as a speculative surge in the prices of milk powder locally. Some parents in the city urge the government to levy a milk powder export tax as a means to solve the problem.

Chow stressed that the government cares about babies' health and pays particular attention to the safety and supply of milk powder. Since the reports of possible shortage of infant formula, the Food and Health Bureau and the Consumer Council have been keeping close liaison with major milk powder suppliers, which have responded positively by increasing the supply of infant formula in the market.

According to the trade, one of the major suppliers has been shipping in milk powder to Hong Kong by air since last quarter, and its supply in February this year will be more than twice of that last year.

The major suppliers of milk powder have also set up free membership systems and they provide delivery service to Hong Kong customers. Their hotline service advises members of the retail outlets with stocks, and assists parents in placing orders for milk powder.

Chow said that according to the government assessment and the information obtained from the trade, the overall supply of infant formula in the market is sufficient. The shortage in the supply of particular brands at some retail outlets was mainly due to the great demand at these retail outlets at certain times.