In a bid to rejuvenate its struggling economy, Hong Kong is planning to lower the spirits tax, which currently stands at 100% of the value for spirits over 30% alcohol, one of the highest rates globally. This initiative is part of Chief Executive John Lee's broader strategy to revive nightlife and stimulate economic growth, particularly in the hospitality sector, which has been hit hard post-COVID. The announcement is expected to be highlighted in Lee's policy address scheduled for mid-October. A tiered tax system is being considered to encourage spending on premium liquors, although discussions are still ongoing and not finalized. The move comes as restaurants, bars, and retailers in Hong Kong struggle with a significant decline in foot traffic and consumer spending, with retail sales plummeting 12% in July 2024, representing a 25% drop from 2018 levels. Bar sales have also decreased by almost 30% during this period. The government aims to capture a larger share of the US$730 billion global spirits industry, as the spirits tax currently contributes approximately HK$717 million to overall revenue, accounting for about 5.6% of total tax income. A previous removal of the duty on wine in 2008 led to substantial growth in that sector, suggesting that similar measures could benefit the spirits market as well. These tax cuts are part of a broader series of economic measures that also include reductions in property stamp duty and tax cuts for foreign home buyers and stock traders, aimed at revitalizing Hong Kong's economy and maintaining its status as a global financial hub. TheCityUK has also called for the removal of stamp duty on trading to enhance investment in UK equities, while Interactive Investor urges a cross-party commitment to scrap stamp duty on share trading in the UK. The ongoing discussions around tax policies reflect a growing recognition of the need for innovative approaches to stimulate economic recovery in the wake of the pandemic and shifting global market dynamics.