Hong Kong will not pursue carbon-based taxation in its decarbonisation efforts, as maintaining a low and simple tax framework is central to the city’s competitive advantage, the financial chief has told a panel at the World Economic Forum.
Speaking at the “How to Finance Decarbonization?” panel in Davos, Switzerland, Financial Secretary Paul Chan Mo-po said that a key strategy by Hong Kong authorities was collaborating with the private sector to develop robust business cases for sustainable initiatives.
Among the panellists was Conrad Keijzer, president and CEO of Swiss chemicals producer Clariant, who asked Chan if Hong Kong would consider “a broader approach” beyond offering tax incentives for electric vehicle purchases, to foster greater demand for decarbonisation.
Keijzer suggested requiring products sold in Hong Kong to disclose their carbon emissions to consumers, and lowering taxes on carbon-neutral or low-carbon products.
In response, Chan said: “We take a different route instead of imposing tax, because our tax is very simple. A simple and low tax regime is Hong Kong’s core competitiveness.”
“We don’t have a Value-Added Tax or a Goods and Services Tax. So what we try to do is to work with the business sector to build business cases.”
Sharing examples with the international audience, Chan said the Hong Kong government had provided subsidies to transport firms to buy and test-run hydrogen fuel cell buses as part of its goal to achieve zero vehicular emissions before 2050.
