Move predicted to boost revenue by HK$1.6b per year but travel industry figures call for a rethink amid concerns of its impact on visitor numbers

Increasing the air passenger departure tax would not undermine Hong Kong's attractiveness to tourists, according to the government, which is aiming to generate HK$5.2 billion annually under a "user-pays" principle that will also affect commuters and overseas talent.

In his budget speech yesterday, Financial Secretary Paul Chan Mo-po said the government would uphold the "user pays" and "affordable users pay" principles while increasing revenue amid a deficit of about HK$87.2 billion for the 2024-25 financial year and an estimated HK$67 billion for 2025-26.

"For some time, some government fees and charges have not been adjusted in accordance with the established mechanisms. As a result, these fees and charges are not pegged to their costs and fail to reflect the 'user-pays' principle," Chan said.

Among the measures, the air departure tax will be increased from HK$120 to HK$200 per passenger starting from October 1, with about HK$1.6 billion to be generated per year in government revenue. "The impact on air passengers is expected to be minimal," Chan added.

A government source said the charge had not been adjusted since 2003 and the levy was reasonable compared with Singapore's, which charges more than HK$370 per air passenger.

"This is only an increase of HK$80 per air passenger. For overseas tourists, this amount is very insignificant. We don't think there will be an impact on the city's tourism or its status as an events hub," the insider said.

The number of passenger departures from Hong Kong airport amounted to around 20.66 million last year, up from around 15.63 million in 2023, according to official data.

For overseas talent and capital investors under the city's various admission schemes, a new application fee of HK$600 will be imposed with immediate effect. Visa fees, to be charged based on the duration of limit of stay, will be increased from HK$230 to HK$600 for less than 180 days, and HK$1,300 for 180 days and more.

It is estimated that government revenue will increase by about HK$620 million per annum.

Another government source said they did not expect the fee increase to drive away talent and investors because the charge was relatively low and well within their affordability.

Chan also said the Transport and Logistics Bureau would review the tolls of relevant government tunnels and trunk roads, the annual licence fee for electric private cars, parking meter charges, and the fixed penalties for traffic offences such as picking up or dropping off passengers in restricted zones.

The measures are expected to raise about HK$2 billion in additional revenue per annum.

Next year, authorities will also introduce a boundary facilities fee for private cars departing via land boundary control points, with coaches and goods vehicles remaining unaffected.

"Taking a fee of HK$200 per private car as an example, the measure will bring in revenue of about HK$1 billion per annum," Chan said.

But tourism industry leaders expressed dismay about the increase in the air departure tax, calling on the government to "rethink" the measure which they believed would undermine the city's attractiveness to transit passengers and its status as an aviation hub.

"I have great reservations about this. The increase will edge closer to the Singapore level and be among one of the highest in the region," said tourism-sector lawmaker Perry Yiu Pak-leung.

"This measure will be detrimental to the attraction of passengers transiting via Hong Kong, especially when we are developing the airport city to entice transit passengers to consume in the city during their break between flights.

"The move will hamper our efforts to tap transit passengers so those having a 24-hour break should be exempted from this departure tax as this will stand in the way of the city's consolidation of its status as an international aviation hub."

Travel Industry Council chairman Tommy Tam Kwong-shun said the move would affect transits via Hong Kong. "Now we have the three-runway system in the airport and we need more passengers to fly to Hong Kong. The government should rethink this tax measure," he said.

Now we have the three-runway system and we need more passengers to fly to Hong Kong Tommy Tam, Travel Industry Council