[:zh]Robust market beckons stamp-duty hike [:]

[:zh]Is Financial Secretary Paul Chan Mo-po being overcautious about whether or not to increase the stamp duty on stock transactions in order to narrow the budgetary deficit that is poised to reach a post-1997 high due to the
pandemic?
It is only right for Chan to exercise caution when it comes to the question of taxation since the financial secretary is obliged to keep the city’s taxation system simple.
Clearly, the stamp duty charged on stock transactions is the most obvious choice of all for him to begin with as pressure mounts to plot a viable pathway to balance the books to avoid trapping the SAR in a lasting
structural crisis.
There is room for the tax – currently levied at 0.1 percent on sellers and buyers- to be moderately adjusted without fear of inflicting permanent damage on Hong Kong’s status as a major financial center.
If this status is ever to be eclipsed, it won’t be due to a rise in the stock stamp duty – and the fear voiced by an alliance of brokers was poorly founded.
When Secretary for Financial Services and the Treasury Christopher Hui Ching-yu last addressed the Legislative Council, he was buoyant that government earnings from the 0.1 percent levy would increase to HK$35 billion this financial year as a result of high trading volumes in the local stock market.
His estimates were conservative in light of record-breaking trading volumes in recent weeks.
Some experts and analysts, including lawmaker Tony Tse Wai-chuen, expressed confidence that government earnings
from stock stamp duty payments would rise to as much as HK$60 billion when the financial year ends next month.
While the lawmaker’s prediction may have raised some eyebrows since it was nearly twice that of Hui, it is not uncommon for government officials to be more cautious than the politicians because, by nature, they tend to be
conservative by erring on the side of caution.
If the financial year really concludes with HK$60 billion in earnings for the government from the stock market stamp duty, it would be not only a droplet of sweet surprise in the face of the pandemic gloom but also strong
grounds for Chan to pronounce a review, or even an increase in the levy.
As far as the stock stamp duty is concerned, there is unlikely to be any opposition from society – except, of course, from the brokers.
It’s a little ironic that, far from being affected by the pandemic, the sector has made a fortune from it as daily trading volumes have risen to levels never seen before.
Perhaps it would be wise for them to reconsider their opposition and support the idea of increasing the stamp duty.
Former government minister Frederick Ma Si-hang made good sense when he argued that, as long as investors believed they could make money here, they would continue to buy and sell stocks in Hong Kong and would not mind paying a little more towards the stamp duty.
Compared to the overall environment here, stamp duty should be the least important factor to concern investors.[:]