Home » Hong Kong Securities Industry Calls for Abolition of Stamp Duty on Stocks: An Analysis

Hong Kong Securities Industry Calls for Abolition of Stamp Duty on Stocks: An Analysis

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Title: Hong Kong Securities Industry Pushes for Stamp Duty Abolition to Boost Transaction Activity

Date: August 14, 2023
Author: Hao Yunying

Hong Kong’s securities industry recently made a compelling call for the abolition of stamp duty on stocks in response to the public consultation on Hong Kong’s 2023 Policy Address. This move comes amidst continued weakness in early trading for Hong Kong stocks. Market experts believe that the cancellation of stamp duty could potentially revitalize the market by increasing transaction activity.

The Hong Kong Securities and Futures Professionals Association argued that the elimination of stamp duty would not only benefit market participants but also have a positive impact on the government’s fiscal revenue. Although the stamp duty has been a significant source of income for the government, its contribution has been limited in recent times.

Stamp duty is a tax imposed on the purchase and sale of stocks. By removing this tax, market participants anticipate a surge in trading volumes as the cost of transactions decreases. It is believed that an increase in transaction activity could help stimulate market liquidity and attract more investors, both domestic and international.

The call for stamp duty abolition has garnered attention from various market participants who have different perspectives on the matter. Critics argue that the government might face a revenue shortfall if stamp duty is eradicated. However, proponents believe that the potential benefits of increased transaction activity would outweigh the loss of stamp duty revenue.

As Hong Kong continues to face challenges in its stock market, authorities are under pressure to introduce reforms and measures that can reignite growth. While there is no guarantee that the abolition of stamp duty alone can spur a significant turnaround, industry experts believe it could be a step in the right direction.

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Furthermore, this proposal highlights the need for continuous dialogue and collaboration between market participants and policymakers to address the evolving needs and challenges of the securities industry. As Hong Kong aims to maintain its status as a global financial hub, it must strive to adapt and innovate while ensuring investor confidence and market stability.

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