Bankers and traders have long been asking for a reduction, but now Hong Kong’s biggest political party, the Democratic Alliance for the Betterment and Progress of Hong Kong, has joined the calls to revive trading in the Asian financial hub. The cost would be significant as the government relies on revenue from stock trading for about 9% of its budget.
At its first meeting on Wednesday, the task force examined data and analysis on market liquidity and investor costs, according to a statement from Tong. The discussion doesn’t exclude a potential stamp duty cut, he said. A government spokesman said in a statement that the task force “will hold additional meetings with a view to making short-term recommendations to the Chief Executive shortly.”
Cutting the duty to pre-2021 level of 0.1% or eliminating it all together would cost HK$12.3 billion and HK$53.1 billion in revenue, respectively, according to an official estimate in July. The task force “leverages the collective wisdom of the industry, market and regulators, and helps examine the strengths and challenges of Hong Kong’s stock market,” the government spokesman said. “The Task Force will propose short, medium and long-term proposals for the Government’s consideration, with a view to enhancing the stock market’s competitiveness and unleashing its development potential.