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Posted on: June 22, 2023, 06:54h.
Last updated on: June 22, 2023, 06:54h.
Hong Kong’s government has launched a new plan to increase the revenue it earns from taxes, and the gambling industry seems like a good place to start. Radio Television Hong Kong reports that one of its biggest targets is the Hong Kong Jockey Club (HKJC), which it has ordered to pay HKD12 billion (USD1.5 billion) over the next five years.
This past February, during the presentation of the 2023-24 budget by Finance Secretary Paul Chan at the Legislative Assembly, the topic of the new tax became part of the discussion. The goal is to replenish the Hong Kong government’s treasury at the expense of the HKJC, even as the club tried to convince the government not to move forward with its plans.
The organization’s new taxes obligation will come from its soccer betting earnings, according to a government statement. The rate could have been higher, with lawmakers deciding that heightened competition in the betting space could subdue the HKJC’s earnings.
Betting Success Means More Taxes
Christopher Hui, Hong Kong’s Financial Secretary, stated that the club will have to continue to support community charities. In other words, the club can’t try to reduce its contributions to counter the newly imposed HKD2.4-billion (US$306.48 million) per-year tax.
Vincent Cheng, representing the Democratic Alliance for the Betterment and Progress of Hong Kong, acknowledged that the decision to consider the reduction of financial support was due to unique circumstances. He also acknowledged that the club’s charitable donations have been instrumental in promoting sports and culture in the region.
In its recent announcement, the club shared that the HKJC Charities Trust has contributed HKD6.6 billion (US$842.82 million) for 2021-22. Of this, HKD1.4 billion (US$178.78 million) had been dedicated to supporting disease control efforts. The trust solely relies on local betting activities to generate its profits, which are then redirected toward various charitable endeavors.
Following Chan’s budget speech, the HKJC requested the government to refrain from implementing the betting tax. This is because its current tax rate for horse racing already stands at an unprecedented 72-75%.
It cautioned that the imposition of such a tax would bring about far-reaching complications. The club warned that it could lead to a disruption in its thriving business model and provide an illegal advantage to gamblers.
New Taxes Coming to Hong Kong Sports
The assertion of the HKJC isn’t universally accepted, according to Regina Ip, the current president of the New People’s Union party. She dismissed the sum the club will have to add to its tax bill, arguing that compared to the HKD10.9 billion (US$1.39 billion) it earned in the 2020-21 financial year, it wasn’t a significant amount.
During a meeting with lawmakers on Wednesday, she remarked that there aren’t many options left for local and state governments to enhance levies. This implies that the administration is bound to research alternative options.
At least one official believes he knows where to look. Tommy Cheung Yu-yan, chair of the Liberal Party and also an honorary voting member of the HKJC, has suggested that betting taxes may be extended to other sports, which could include the highly popular badminton and basketball.
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