Following is a question by the Hon Andrew Fan and a written reply by the Secretary for Culture, Sports and Tourism, Miss Rosanna Law, in the Legislative Council today (May 20):
 
Question:
 
     The National 15th Five-Year Plan emphasises the need to comprehensively promote the high-quality development of the sports industry. In recent years, the Hong Kong Special Administrative Region Government has also been promoting sports development in Hong Kong through the implementation of a five-pronged approach, i.e. promoting sports in the community, supporting elite sports, maintaining Hong Kong as a centre for major international sports events, enhancing professionalism in sports and developing sports as an industry. However, a study has indicated that the local sports industry currently relies heavily on public funding, with few measures to promote sports sponsorship and limited tax incentives to encourage resources from the business and private sectors. All these have posed considerable challenges to the industry. In this connection, will the Government inform this Council:
 
(1) whether it has compiled statistics on the number of industry-related entities in Hong Kong over the past three years, including national sports associations (NSAs), community sports clubs, sports clubs and professional sports organisations, and provide a breakdown by the nature of these entities (e.g. enterprises, social enterprises, non-profit-making organisations and charitable institutions);
 
(2) given that expenditure incurred by enterprises on sports sponsorship may currently be treated as marketing expenditure eligible for tax deduction, of the amount of money involved in such tax deductions over the past three years; whether the authorities will study the optimisation of the relevant tax deduction and concession measures with a view to strengthening incentives for private organisations and enterprises to make donations and provide sponsorship; if not, of the reasons for that;
 
(3) given that many overseas NSAs operate as philanthropic or charitable organisations, thereby enabling enterprises or individuals to obtain tax concessions when making donations or providing sponsorship, whether the authorities will consider following such practice by encouraging and assisting local NSAs in transforming into charitable institutions of a public character, so as to enable them to attract more private and corporate sponsorship; if so, of the specific measures; if not, the reasons for that;
 
(4) whether the authorities will regularly compile statistics and conduct studies on the development of sports as an industry, and formulate specific policy objectives and initiatives for strengthening the development of the sports industry, so as to boost the output value of the local sports industry and develop it into a new industry for Hong Kong; if not, of the reasons; and
 
(5) whether, in selecting major sports events to be supported under the "M" Mark System, the authorities will give greater consideration to the following three factors or criteria: (i) the contribution to promoting local sports development; (ii) the capability to attract commercial sponsorship; and (iii) the effectiveness in enhancing public enthusiasm for participating in team sports; of not, of the reasons for that?
 
Reply:
 
President,
 
     The Government has been allocating substantial resources to promote sports development and proactively implemented the five key policy objectives (the five-pronged approach), by promoting sports in the community, supporting elite sports, maintaining Hong Kong as a centre for major international sports events, enhancing professionalism in sports, and developing sports as an industry. In 2026-27, the Government's estimated expenditure on sports development is about $8.1 billion, which is nearly 70 per cent higher than the expenditure of about $4.8 billion ten years ago. In addition to allocating resources, the Government strives to encourage and attract the business and private sectors to participate in and invest in activities including major sports events, leveraging market resources to promote sports as an industry.
      
     Having consulted the Financial Services and the Treasury Bureau, our reply to the question raised by the Hon Andrew Fan is as follows:
 
(1) In the past three years, national sports associations (NSAs), sports organisations (SOs) and community sports clubs (CSCs) under the subvention of the Leisure and Cultural Services Department are all non-profit-making organisations. The relevant figures are listed below:
 

	NSAs	SOs	CSCs
2023-24	62	43	445
2024-25	62	41	450
2025-26	62	45	450

     The Government does not maintain statistics on the breakdown of the aforementioned NSAs, SOs and CSCs by the categories of enterprises, social enterprises, non-profit-making organisations and charitable institutions. The Government also does not maintain statistics on the number of sports clubs and professional sports organisations in Hong Kong.
 
(2) and (3) All outgoings and expenses, to the extent to which they have been incurred by the taxpayers (including companies) in the production of chargeable profits, are allowed as deductions under the Inland Revenue Ordinance (Cap. 112) (IRO). If a commercial organisation sponsors a sports event in order to promote its business, the sponsorship concerned may be treated as marketing expenses incurred in the production of chargeable profits, and thereby allowable as deductions. 
 
     In addition, for taxpayers (including companies) who make aggregate donations not less than $100 to any tax-exempt charitable institution under section 88 of the IRO, the donations may be deducted from the assessable profits under profits tax, net assessable income under salaries tax and total income under personal assessment for the relevant year of assessment. The total deduction allowable in any year cannot exceed 35 per cent of the donor's assessable profits or income.
      
     Under section 88 of the IRO, charitable institutions or trusts of a public character are exempt from profits tax subject to the fulfilment of certain conditions in relation to the trade or business carried on by them. In processing applications for tax exemption under section 88 of the IRO, the Inland Revenue Department (IRD) has been making reference to the relevant common law cases to determine whether an organisation's object is an exclusively charitable purpose at law, and whether the organisation is established for public benefit.
      
     The IRD does not maintain statistics on the tax deductions for expenditures on sports sponsorship.
      
     Commercial organisations' expenses in promoting their businesses through sports sponsorships are already treated as expenses incurred in the production of chargeable profits and allowable as deductions, and a deduction arrangement is in place for donations to tax-exempt charitable institutions. In addition, given Hong Kong's current low tax rates, the Government will not at present consider providing tax deductions or additional tax concessions for expenses on sports sponsorship.
      
     In promoting Hong Kong as a centre for major international sports events, the Government attracted more market funds through matching funds. This enhances not only the quality but also the commercial momentum of events, further expanding the scale and benefits of the sports industry. In particular, the Government established the "M" Mark System, allocating funding through matching sponsorship and direct grant to support organisers in hosting large-scale sports events, thereby consolidating Hong Kong's position as a centre for major international sports events. In 2024-25, a total of 30 major sports events were awarded "M" Mark status, involving a total of about $402 million in commercial sponsorship and about $284 million in matching fund.
      
     Apart from the "M" Mark System, the Government also provides direct and matching grants for major local international events, major national championships and local international events through the Arts and Sport Development Fund (ASDF) (Sports Portion) to support NSAs in organising international sports events in Hong Kong. In 2024-25, a total of 120 events were supported by the ASDF (Sports Portion), involving a total of about $13 million in commercial sponsorships and about $12 million in matching grants. 
 
(4) The Census and Statistics Department (C&SD) has been publishing statistics on the economic contribution of sports and related activities in Hong Kong every year since 2019, with the earliest figures covering 2016. According to the latest figures released by the C&SD in 2025, the value added of Hong Kong's sports and related activities at basic prices in 2023 was around $44 billion, representing an increase of 15.1 per cent compared with 2022, and accounting for 1.5 per cent of the Gross Domestic Product. In terms of employment, more than 80 000 persons were employed in sports and related activities in 2023, representing an increase of 12.8 per cent compared to 2022.
 
     The development of sports as an industry permeates and intertwines with various areas of sports development, and it is gradually generating synergy effect with the other four aspects, namely, promoting sports in the community, supporting elite sports, maintaining Hong Kong as a centre for major international sports events and enhancing professionalism in sports. To further promote the development of sports industry in Hong Kong, we are actively implementing different measures, such as promoting community-wide participation in sports to foster a strong sports culture in the community; attracting more world-class sports events to be staged in Hong Kong; boosting the development of "sports + mega events" while encouraging commercial organisations to invest in the sports market; and making full use of the Kai Tak Sports Park to develop a host-city economy. The Government will continue to maintain close communication with the sports sector and formulate policies to further enhance the development of sports as an industry.
 
(5) The Government will review each event application according to established mechanisms. The review criteria include the event's status and significance, financial viability (including sponsorship from private enterprises), economic impact, media coverage and marketing plans, community appeal and social benefits, sports development impact, as well as the ability, technical and administrative quality of the organiser, in order to ensure the effective use of public money for bringing the greatest benefits to Hong Kong as a whole.

Ends/Wednesday, May 20, 2026
Issued at HKT 11:20

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