HONG KONG — The Hong Kong government estimates it will earn HK$35 billion ($4.52 billion) in revenue in the current financial year from the 0.1% ‘stamp duty’ charged on stock transactions as a result of high trading volumes, a minister told lawmakers.
The HK$33.23 billion earned from the levy in the 2019-2020 financial year ended March 31, 2020, accounted for about 5% of government revenue, Christopher Hui, Hong Kong’s secretary for financial services and the treasury, said in a written response to a question from a lawmaker.
Average daily turnover for securities traded in Hong Kong was 49% higher in the 2020 calendar year than a year earlier, according to stock exchange data, aided by coronavirus-driven sharp market volatility. The local benchmark hit a 20-month high last month.
Both buyers and sellers of securities listed in Hong Kong are required to pay 0.1% of the value of transactions, though certain products, such as exchange traded funds, are exempt.
Other major global trading centres such as the United States and Japan do not charge such a fee.
Hui said the government would continue to examine the rate of stamp duty, given the need to balance government revenue and the competitiveness of Hong Kong’s stock market.
($1 = 7.7512 Hong Kong dollars)
Reporting by Twinnie Siu and Alun John; Editing by Rashmi Aich; Reuters