The Federation wish to update you on the passage of the Air Passenger Departure Tax (Amendment) Bill 2025 by the Legislative Council, which will implement the proposal in the Budget to increase the air passenger departure tax from HK$120 to HK$200 per passenger. The new rate will apply to tickets purchased on or after 1 October 2025 and is expected to generate an additional HK$1.6 billion in annual government revenue. The Bill will be gazetted on 6 June.

The government has emphasized that in considering the tax increase, a balance was struck between raising revenue and minimizing the impact on passengers. Acting Secretary Mr. Chan described the additional HK$80 as a reasonable and affordable increase, with only a minimal effect on overall travel expenses.

Key Points:

• New Exemption for Transit Passengers:
  In response to feedback from legislators and stakeholders, the exemption criteria under the tax ordinance have been relaxed. Passengers who arrive and depart by air within 48 hours (previously same-day only) will be exempt from the departure tax.
  The exemption will also be further extended to passengers entering Hong Kong via land or sea border points to catch a connecting flight within 48 hours.
  The government aims to attract more transfer passengers, especially from the Greater Bay Area, to use Hong Kong International Airport, thereby enhancing the airport’s competitiveness.

• Industry Impact:
  The government described the new exemptions are a positive development for Hong Kong’s tourism and hotel sector, as increased transit traffic can boost hotel occupancy, F&B, and retail consumption.

• Government Collaboration and Promotion:
  The government is working closely with the Airport Authority, Tourism Commission, and Hong Kong Tourism Board to promote these new exemptions and encourage transit passengers to explore Hong Kong during their stay, supporting local tourism and stimulating the economy.

• Administrative Arrangements Simplified:
  The Bill also simplifies the payment arrangement for administrative fees between the government and airlines, streamlining related accounting procedures.

For further details, the full speech by the Acting Secretary for Financial Services and the Treasury is available here (Chinese only).