Hong Kong planning to cut tax on spirits in bid to revive nightlife

Hong Kong is planning to lower the amount of tax it levies on spirits, according to people familiar with the matter, as the Asian financial centre seeks to regain its edge as a premier destination for nightlife, dining and shopping.

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The reduction is expected to be one highlight of Hong Kong Chief Executive John Lee's policy address in mid-October, the people said, asking not to be identified because the deliberations are private.

Liquor that has an alcohol content of more than 30 per cent currently attracts a duty equivalent to 100 per cent of its value in Hong Kong - among the highest anywhere in the world.

One approach the government is considering is a tiered system whereby more expensive spirits would be taxed less, one of the people said. It is thought that that could boost spending on premium liquor among a higher value type of clientele while discouraging consumers to stock up on cheap drinks in a bid to also limit health risks, the person said.

Discussions around the spirits tax are not final and may still change, the people said.