HONG KONG (Reuters) – 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.
(Reporting by Twinnie Siu and Alun John; Editing by Rashmi Aich)