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Publications and Press Releases :
Press Release
: News Archives
GST and maintaining the competitiveness of Hong
Kong's logistics industry
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In response to media enquiries,
a Government spokesman said today (October 13) that the proposed
tax reform with GST introduction has been designed to maintain competitiveness
of the logistics industry, which everyone knew was very important
to Hong Kong as a major trading and logistics centre.
As exports of goods and international
supplies are proposed to be zero rated (i.e. no GST when exporting
the goods and services, but entitled to reclaim input tax on related
purchases), there would be no GST cost on these goods and services
and competitiveness of these trades should therefore not be affected.
In considering the definition of international supplies, the spokesman
said that the Government had deliberately proposed a generous definition
to include as many ancillary and supporting services related to
exports (e.g. services provided by the logistics industry) for zero
rating as possible.
In addition, proposed facilities
such as the Deferred GST Payment Scheme and implementation of a
Qualifying Exporters Scheme would be helpful to importers in relieving
their possible cashflow concerns. The spokesman also said that similar
GST postponement schemes were in place in most other jurisdictions
with a GST. These proposed schemes would help maintain Hong Kong's
competitiveness as an international trading and logistics hub.
The spokesman said the Government
fully appreciated the concerns of the logistics trade in regard
to the likely increase in their workload and cost for complying
with the GST goods declaration requirements. However, the Government
was committed to keep these requirements as simple and incur the
least changes possible. Under the proposal, trade declaration charges
would be reduced and duties on fuel would also be reduced to enhance
the competitiveness of the logistics trade. Importers and exporters
would be allowed to electronically lodge goods declaration, together
with trade declaration (which they have been lodging under the existing
import and export framework), simultaneously to reduce workload.
The spokesman also said that the
Government would work closely with the import/export and logistics
trade and relevant business chambers to ensure that the proposed
GST framework on trade would maintain the competitiveness of Hong
Kong.
Ends/Friday, October 13, 2006
Issued at HKT 18:15
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