Increasing the air passenger departure tax will 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 on Wednesday, 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 (US$11.2 billion) for the 2024-25 financial year and an estimated HK$67 billion for 2025-26.

“For some time in the past, 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,” he 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 that of Singapore which charges more than HK$370 per air passenger.