Stock stamp duty increased by 30% Zhang Huafeng's amendment to set a one-year "sunset clause" was rejected

Political situation

Written by: Zhou Haoyi

2021-04-23 15:20

Last update date: 2021-04-23 15:20

The Legislative Council's Bills Committee on Revenue (Stamp Duty) Bill 2021 held a meeting today (23rd) to consider measures to increase stamp duty on stocks from 0.1% to 0.13%.

After the Pakatan Harapan financial services member Zhang Huafeng proposed an amendment to add a one-year "sunset clause", after the epidemic subsides, the stock stamp duty will be reduced to the level of 0.1%, and it is recommended that the seller's stamp duty be increased unilaterally, and the buyer maintains constant.

The Deputy Director of the Bureau of Financial Services and the Treasury, Chen Hao Lian, said that the tax rate adjustment this time takes into account the economy, government finances and market conditions. It has achieved a balance between increasing treasury revenue and the continued development of the financial market. The addition of the "Sunset Ordinance" is not supported.

In the end, Zhang Huafeng's amendment had 4 votes for, against and abstaining from voting, and it was not passed.

Zhang Huafeng said that the industry is worried that increasing stamp duty will become a long-term government policy, and it is recommended to add a "Sunset Regulation" for a period of one year. After the epidemic subsides and economic growth resumes, the stock stamp duty level will be restored to 0.1%.

He also proposed to increase the seller's stamp duty only unilaterally, thinking that the impact of the increase in stamp duty on the market could be reduced.

In addition, he suggested that the effective date of the new tax rate be extended from August 1 this year to January 1 next year, so that the industry has sufficient time to change its investment strategy.

The government does not support the addition of a "sunset clause"

Chen Haolian responded that the government must control expenditure and increase revenue in the face of the ever-increasing pressure of public finances. The tax rate adjustment this time has balanced treasury revenue and continued development of the financial market. Taking into account the economy, government finances and market conditions, it does not support additional establishments. "Sunset Clause".

He continued that the main purpose of increasing stamp duty on stocks is to increase fiscal revenue. If only a unilateral tax system is received, the government's expected additional revenue will be halved, which is not in line with the original policy intent and will also affect the market ecology.

He said that the government is scheduled to implement the new tax rate on August 1, taking into account the legislative procedures and the adjustment time of the industry.

The Federation of Trade Unions Lu Songxiong said that it strongly supports the government to increase the stamp duty on stocks, which refers to the fact that stocks are not necessities of life. People who buy stocks own certain assets. He believes that the increase in stamp duty will have the least impact on people's livelihood and all walks of life. It is a trivial expenditure. "Into the flesh" can also embody the principle of "those who have the ability to pay more", expressing opposition to Zhang Huafeng's amendment.

The DAB Jiang Liyun thinks that Zhang Huafeng's amendment is worthy of consideration, criticizing the government for not attacking the wealthy and still exempting private equity funds from profits tax.

She said that one-third of adults in Hong Kong are stockholders. If they have to pay more taxes regardless of their profit or loss, it is equivalent to increasing the burden of middle-class citizens.

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