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HK faces pressure to cut stock trading tax after China’s move


China’s recent decision to reduce its stock trading tax is pressuring Hong Kong to consider a similar action, potentially impacting about 9% of the city’s budget, which is sourced from stock trading revenue. This has intensified discussions within Hong Kong, with the city’s dominant political party, the Democratic Alliance for the Betterment and Progress of Hong Kong, endorsing the call to rejuvenate trading. Financial Secretary Paul Chan, responding swiftly to Beijing’s aggressive stance, has advanced plans and established a task force, headed by Carlson Tong, formerly of KPMG China. This task force, including representatives from major institutions like Morgan Stanley and Citigroup Inc., is set to draft an action plan within the month. The task force’s inaugural meeting indicated potential stamp duty reductions, aligning with current market sentiment and liquidity concerns.

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