Hong Kong’s virtual asset sector considered for taxation under policy review

A new government committee tasked with reviewing Hong Kong’s tax policies will consider updating them to allow for levies on the virtual asset sector and selected emerging industries, while providing incentives to attract business and investment, the South China Morning Post has learned.

The SCMP learned of the development on Wednesday as experts called for Financial Secretary Paul Chan Mo-po to regard the new Advisory Committee on Tax Policy, which he will chair, as an opportunity to conduct a long-overdue, comprehensive review of the tax system.

They also warned that excessively taxing the virtual asset sector could undermine confidence among potential investors in an industry with significant growth potential.

Chan’s latest budget included a chapter dedicated to attracting enterprises and investment, with the finance minister saying the committee would gather views from external advisers about how tax policies could “reinforce economic development”.

Explaining the initiative at a press event, he said: “[We will] focus on how to use tax policy as a competitive tool in terms of attracting business, attracting investment and growing our economy.”

Chan made it clear that value-added taxes, including a goods and services tax, would not be considered.