The tourism industry, one of the pillars of Hong Kong's local
economy, feared that it would be the hardest hit if the goods and services tax
was introduced in Hong Kong.
A spokesman for Hong Kong Tourism Board (HKTB) said duty-free concept had
long been their promotion strategy, and the introduction of the tax would affect
The spokesman urged the government to exercise prudent consideration on the
opinions and objections from the tourism sector.
The board was planning to collate reactions from the travel trade and
visitors through consultation and market surveys, the findings of which will be
submitted to the government.
The spokesman hoped that the tax would not affect tourists' inflow and
visitors' spending in Hong Kong, or undermine the city's reputation as a
Inbound Tour Operators Association chairman Charles Ng said the mainland
visitors' spending in Hong Kong had been dropping from about HK$7,000 per person
HKTB figures showed that the per capita overnight mainland visitors' spending
had reached HK$5,487 in 2002 and HK$5,235 in 2003. But the figure dropped to
HK$4,355 in 2004 and HK$4,554 in 2005.
The per capital overnight visitor spending in all major market areas in 2005
was HK$4,663, of which 53 per cent was on shopping.
Ng said the consumption pattern of the mainland visitors had changed since
the introduction of individual travellers scheme.
"In the past, mainland people would purchase their favourite items. But they
can come to Hong Kong more easily now, and they will not purchase until they
have compared the prices and decided that it is really worth buying," he said.
Ng said Hong Kong's attractiveness was losing as a lot of products that were
exclusive to the city in the past could be bought in major mainland cities.
Ng also said mainland tourists travelling on packaged tour would look for
bargaining price for goods and services.
"If the tax is introduced, prices will go up and the tourists will have less
demand for our goods and services," he said.
This will severely affect the operation of travel agencies, he said.
"Tourists may not come to Hong Kong for shopping. Some travel agencies might
close and this will affect the whole economy. Introducing the tax is more a loss
than gain," he said.
However, Sunflower Travel assistant general manager Henley Tse said
introducing the tax would not affect the sector as it was a common practice in
other countries, including Japan, Korea and Singapore.
Hong Kong's reputation as "shopper's paradise" will not
be affected as the special administrative region is well-known for offering
genuine and high quality goods, he added.