Hong Kong Government Could Tax Internet Use

Mary Swire, Tax-news.com, Hong Kong

18 January 2001

According to the local press in Hong Kong, the government is mulling the introduction of a tax on Internet users. There is concern that such a tax could constitute a threat to the continued growth of e-commerce in Hong Kong. The suggestion is that Internet users would be charged for each minute that they are online.

The initial rate for the tax is expected to be HK$0.01 per minute (around £0.05 per hour). The levy sounds small, but it would be a big (if unpopular) coup for the Hong Kong government, whose coffers would bulge under the weight of an additional HK$150m (£13m) per annum.

Apparently the figure being bandied about is just a sample figure. The bad news for Internet users is that if the tax idea works, the tax will almost definitely be increased, and it could become a reality as early as the beginning of March 2001, when the next financial year commences.

Hong Kong's Internet users presently pay a public non-exclusive telecom (PNET) surcharge of 2.3 cents per minute to Pacific Century CyberWorks, irrespective of which ISP they use, not to mention telephone and ISP charges, so news of the government's proposed tax is likely to meet with hostility.

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