*********************************************
The Government will publish in the Gazette on Friday (April 25) the legislative amendments that are required for giving effect to the Budget proposals on the reduction of wine duty to zero.
In his 2008-09 Budget, the Financial Secretary proposed reducing duties on wine (and other liquors) to zero, and the removal of licensing/permit arrangements related to duty collection.
By amending the Dutiable Commodities Ordinance, the legislative proposals to be gazetted serve to put :
(a) the duty reductions, now temporarily in force, on a permanent footing; and
(b) the related licensing/permit arrangements, now temporarily retained, on permanent suspension (until and unless duties for the liquors concerned are brought back in future).
The duty reductions were already given immediate effect on the Budget Day (February 27) through an executive order made under the Public Revenue Protection Ordinance. As a result, the duty of wine has been reduced from 40% to 0%, and that for beer (and any liquors with alcoholic content less than 30%) from 20% to 0%.
A government spokesman said that as the executive order would lapse in four months, it was necessary for the Government to introduce the relevant legislative amendments into the Legislative Council (LegCo) as soon as possible after passage of the Appropriation Bill 2008.
The duty reductions have already benefited consumers. A survey on the most popular wines indicates that the average retail prices have reduced by about 20%.
Relative to the same period last year, the volume of wine imports since the duty reduction has increased by about 78%. The initial market response to the duty reductions is encouraging, in terms of positive impact on the further development of wine business in Hong Kong.
ˇ°Upon passage of the legislative amendments, wine traders/companies will no longer be required to apply for any licences or permits for the import or export, manufacture, storage or movement of these goods. No evaluation of the alcoholic beverages concerned for duty purpose will be required either,ˇ± the spokesman said.
Not only will this cut business costs on top of the duty reductions, it will also shorten the time required for imports and exports, thereby facilitating the wine trading and distribution business.
Under the Legislative Council Ordinance, the Import and Export functional constituency (FC) is composed of, among others, companies licensed to import/export liquors. Upon removal of the relevant licensing requirement, wine and beer importers/exporters will lose their eligibility to vote or register as electors for this FC when their present annual licences expire. To maintain the existing electorate basis for the LegCo Import and Export FC, we propose to grandfather those who hold valid licences for such trading activities immediately before the legislative amendments take effect. Notification letters will be issued by the Registration and Electoral Office to the relevant traders.
ˇ°The legislative amendments will be introduced into LegCo on May 7. We hope to complete the legislative process the latest by end June,ˇ± the spokesman said.
Ends/Wednesday, April 23, 2008
Issued at HKT 18:43
NNNN