Hong Kong earns HK$189 million from revived hotel tax in first quarter

Hong Kong only received HK$189 million (US$24.1 million) in the first quarter under a reintroduced hotel accommodation tax, authorities have revealed, prompting some tourism industry leaders to raise concerns about whether the government can meet its HK$1.1 billion annual income target.

Sector veterans also called for more government support measures, telling the Post that the tax figures reflected that hotels were struggling and had been forced to reduce their prices to attract tourists.

The 3 per cent tax, which applies to all patrons, was reintroduced on January 1.

The government announced the policy’s return last year and said the measure was expected to bring in HK$1.1 billion each year. The tax was previously waived in 2008.

But in a reply to the Post in June, the Inland Revenue Department said the government had garnered HK$189 million under the tax in the first quarter of this year, while payments for the second quarter were not yet due at the time of its reply.

“We aim to meet the government’s tax target, but we are concerned we might not be able to meet the target,” said Caspar Tsui Ying-wai, executive director of the Federation of Hong Kong Hotel Owners.