Safest bet to put stock tax back to previous level: CE

Chief Executive John Lee on Thursday dismissed suggestions that his cut in stamp duty on stock trading is not enough, saying reducing the levy to its previous level was the most immediate and safest option.

At a Legco question-and-answer session, financial services sector lawmaker Robert Lee said the cut from 0.13 percent to 0.1 percent, announced in this week’s Policy Address, is not aggressive enough.

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“Is there room for further reduction? And why is it that you did not go for a more proactive or aggressive approach?” the lawmaker questioned.

In response, the CE said the most direct option was to reduce the stamp duty back to its level before a hike in 2021, as it was difficult to be scientific in determining how much to cut.

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“Stamp duty is a source of revenue for the government. We have done different calculations on the foregone revenue with different percentages, but it’s hard to tell, because it depends on the transaction volume. And there are many factors that affect the transaction volume, it’s not just the stamp duty rate,” he said.

“That’s why I decided to, at first, immediately adopt a balanced solution. I have considered all different views and factors. I have also considered the need to enhance liquidity, and I came up with this decision.”

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