Signs for the Hong Kong Exchanges & Clearing Ltd. (HKEx) in Hong Kong
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Hong Kong’s plan to raise the stamp duty on stock trading will not harm the competitiveness of the city’s financial markets, Finance Secretary Paul Chan told CNBC on Friday.
Chan said in his budget speech Wednesday that the government will raise the stamp duty paid on registered stock trading from 0.1% to 0.13%. This news started selling in shares of the city’s stock exchange operator, and the wider Hong Kong market.
“The Hong Kong market has been doing very well, very actively, the volume has gone up a lot,” Chan told Emily Tan at CNBC.
“So now may be the time for us to increase the stamp duty slightly which will not harm our competitiveness and at the same time provide additional revenue for the government at this stage,” he said.
The finance secretary said Hong Kong authorities in recent years have launched various initiatives to strengthen the competitiveness of the city’s stock market. That includes allowing lists of two-class shares and attracting Chinese companies registered in the U.S. to seek a high school listing in Hong Kong, he said.
Hong Kong in 2020 was one of the top markets for listings worldwide as Chinese companies such as e-commerce giant JD.com and the game company NetEase raised money through secondary listings.
In total, the city ‘s stock exchange saw 132 original public offerings worth $ 32.1 billion, and 199 additional offers worth $ 62.9 billion last year, according to data compiled by consultant PwC.
With such “strong” capital market activity, an increase in trade stamp duty may provide Hong Kong with a “quick fix” to increase tax revenue in the short term, said Stanley Ho, partner for corporate tax advisory. at the KPMG China consultation.
“However, it is also important that Hong Kong’s capital markets remain competitive with global financial markets, many of which are moving toward reducing or eliminating such obligations,” Ho said. in a statement following the budget speech No.
Chan said he remains optimistic about Hong Kong’s prospects as an international financial center.
He explained that the government is working on promoting Hong Kong as a center for sustainable and green finance, developing the city’s established income markets and encouraging more activity in the asset and wealth management sectors.
On the stock market sale after announcing a trade tax hike, Chan said Hong Kong was not the only one to suffer a “downward shift” after a previous run.
“So I would not be bothered by temporary fluctuations in the market. What we believe is that we continue to work hard to increase our market offer to increase market competitiveness and attractiveness. Hong Kong, “he said.
“We will continue to attract an inflow of international capital. ”