Diesel Tax Exemption Proposed In HK

by Mary Swire, for LawAndTax-News.com, Hong Kong

27 June 2008

Hong Kong's Housing & Transport Bureau on Monday proposed to exempt the duty on diesel by amending Schedule 1 to the Dutiable Commodities Ordinance, to alleviate the impact of rising fuel costs on the transport and logistics industry.

The Bureau told lawmakers that it hopes the exemption can come into effect within this legislative session, adding that it will keep in view the economic environment, and consider imposing the duty again as appropriate.

It added that there is no question of a Government fuel subsidy, arguing that this would be inconsistent with the free-market principle and level playing field championed in Hong Kong. It would also put a heavy burden on taxpayers and public finances.

The Bureau additionally announced that it would not be appropriate to lower the duty for ultra low sulphur diesel on environmental grounds.

Since Euro V diesel is more effective than ultra low sulphur diesel in reducing diesel vehicle emissions and improving roadside air quality, the Government ought to provide a higher tax concession to Euro V diesel than ultra low sulphur diesel to encourage the trade to use this cleaner fuel, it concluded.

Recommended