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People queue up to place their bets for the Mark Six draw at a Hong Kong Jockey Club outlet in Central in 2017. Photo: Dickson Lee

Letters | To help coronavirus-hit Hong Kong tide over lean times, fatten public coffers with higher betting duty

  • With the government poised to unveil a budget in record deficit, it’s time to consider ways to raise revenue. Surely Hongkongers would not mind paying a little more to bet on Mark Six, horse racing or football matches
On February 14, the Hong Kong government announced funding worth HK$25 billion to alleviate the economic hardships resulting from the coronavirus outbreak, which this week was increased to HK$30 billion. This followed a welfare package amounting to HK$10 billion which was rolled out in January.
On February 16, Financial Secretary Paul Chan Mo-po warned that Hong Kong is likely to see its biggest-ever budget deficit in the next fiscal year as it deals with the impact of the coronavirus outbreak and the months-long protests that have helped push the city into recession.
The Hong Kong economy contracted 2.9 per cent year on year in the last quarter of 2019 and 2.8 per cent in the third quarter, due to weak domestic and external demand amid the violent anti-government protests and the US-China trade war. Advance estimates showed private spending decreased 3 per cent, gross fixed capital formation slumped 16.2 per cent, and exports and imports went down 2.6 per cent and 7.2 per cent respectively. In 2019, Hong Kong’s gross domestic product contracted 1.2 per cent, the first annual decline since 2009.
The financial secretary will deliver his budget speech next week and, writing on his blog, he said the government would have to pay more attention to financial sustainability and not spend beyond its means in future.  

It is always arguable that high public expenditure is inevitable. The government must instead explore ways to generate more revenue to maintain its financial sustainability so that it can spend as needed.

Betting duty has provided a stable source of revenue to the government, taking up 4.6 per cent to 5.2 per cent of annual government revenue between 2008 and 2018. The Hong Kong Jockey Club alone disbursed some HK$23.3 billion to the government in the financial year 2018-2019, in the form of betting duty and profits tax, making it the largest single taxpayer in Hong Kong.

Why are ordinary racing fans being left out in the cold?

The government should consider increasing betting duty in the 2020-21 budget. Since the Jockey Club began to manage the Mark Six lottery on behalf of the government in 1975, 25 per cent of the proceeds is paid to the government as betting duty and another 15 per cent goes to the government’s Lotteries Fund to finance social welfare projects. Between 72.5 to 75 per cent on the net stake receipts from betting on horse races and 50 per cent from betting on football matches are also collected as betting duty.
Although the Mark Six draws have been suspended since the last draw on February 1, people in Hong Kong would not mind being charged a bit more when betting on Mark Six, horse racing or football matches.

Meanwhile, slightly increasing tobacco duty may also be an option as it could help achieve the government’s health objective and provide a stable source of revenue for the government.

Raymond Ho, Sai Kung

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