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The art of the auction

Stamp duty and a lack of professional skills are the hurdles standing in the way of Macau’s auction industry for antique items and artworks.

The auction industry is a field worth developing here in Macau since the city already has the infrastructure such as venues for proper display and the hosting of events, said Wong Cheng Pou, a representative of an association specialising in Chinese cultural promotion that has been commissioned by the government to study the prospects for an artworks and antique auction businesses in the MSAR.
Mr. Wong indicated that Hong Kong’s auction market is almost saturated and that Macau could take a slice of the pie as more buyers and sellers may be willing to come over here for a new experience, especially when the Hong Kong-Zhuhai-Macau Bridge is complete.
The auction industry can help the city diversify its economy and create more jobs, as it involves promotion, sales and artwork display, said Mr.
Wong at the first plenary meeting in 2016 of the Cultural Industry Committee held yesterday. He also pointed that it would help Macau’s cultural and creative industry as auctions may help sell local artworks to international buyers.
Currently, there are 78 registered companies in the antique and artworks’ auction business in Macau. Macau Chung Shun International Auctions Co., Ltd. is the largest organisation in its field. Last year, at one auction it sold items valued at MOP1.2 billion (US$150 million) according to Mr. Wong.
He said that the estimated profit of the auction industry would be between MOP7 billion to MOP30 billion per year once developed and could create 11,000 to 45,000 jobs in Macau including 4,200 to 18,000 jobs directly related to the auction industry, according to Mr. Wong.
However, he also added that currently Macau still lacks professionals in this area, which will require skilled human resources, and the security that is currently insufficient in Macau.
Stamp duty
Currently, Macau has no specific law regulating the auction industry.
But laws in place are enough to support the development of the industry, according to Tong Io Cheng, another representative of the research team who attended the cultural industry committee meeting yesterday.
There is no tax-free incentive for the auction industry, hence stamp duty still applies for items sold at auction.
Nevertheless, Angela Leong On Kei, Executive Director of casino operator SJM Holdings Ltd, who also presented at the meeting yesterday, disagreed with the policy and said it may cause conflicts and misunderstandings between buyers and sellers. Leong, claiming to be experienced in auctions, said that sales should be tax-exempt to help the development of the industry.
While some raised concerns that such a business may be used as a conduit for money laundering, Ms. Leong said that transactions are always made through banks that perform background checks of the buyer and pointed out that integrity is the key to building up the industry.
The Secretary for Social Affairs and Culture, Alexis Tam Chon Weng, who chaired the meeting, said that he would host a discussion with the Financial Services Bureau (DSF) regarding the stamp duty and hoped to set up a special task force to study the development of the auction industry.
Developing art scene
There were 1,038 registered companies engaged in the cultural and creative industry as of 2014, employing some 7,188 people and generating MOP3.8 billion in revenues that year, according to Ieong Meng Chao, the director of the Statistics and Census Service (DSEC), who shared the data at yesterday’s meeting.
Some 726 companies in creative design generated MOP1.31 billion in revenue; 207 companies in digital media accounted for the biggest chunk of MOP1.37 billion; 91 in cultural exhibitions and performances took MOP1.1 billion; and 14 companies in art collection made MOP5 million.
Mr. Ieong indicated that for collecting relevant data in 2015 new categories will be included such as music production, PC software, gaming design, construction design, photography and art performance training, and art performance venues.
The Secretary also indicated that in order to support the local cultural and creative industry, the government should prioritise local companies in the procurement of relevant products.
In addition, Alexis Tam claimed that with the demand for making promotional videos by different government departments increasing, local production companies would be prioritised.