60
PUBLIC FINANCES
proof spirit are dutiable on the alcohol content at the rate appro- priate to liquor. There is a small yield from duty on methyl alcohol, but it is only levied as a means of controlling the move- ment and use of this toxic substance. Methyl alcohol used in the overhaul and testing of aero-engines is exempt from duty.
No dues are levied on exports. Drawback is paid, in certain circumstances, on duty-paid commodities used in the local manu- facture or preparation of goods exported from the Colony.
RATES
Rates have been levied in the Colony since 1845 when an Ordinance was passed to raise an assessed rate on lands, houses and premises 'for the upholding of the requisite Police Force'.
The basis of rateable value is the annual letting value of a 'tenement', by which is meant any land or building (or part thereof) held or occupied as a distinct or separate tenancy or under licence from the Crown. The Valuation List covers the rating areas of Hong Kong Island, Kowloon, New Kowloon and also a part of the New Territories adjacent to the main road from Lai Chi Kok to Castle Peak. In Hong Kong Island, Kowloon and New Kowloon rates are charged, with a few exceptions, at 17% per annum of rateable value: in the New Territories (outside New Kowloon) the charge is 11%. The Valuation List is prepared by the Commissioner of Rating and Valuation and is frequently revised to bring it up-to-date. Rates are due quarterly in advance and demand notes are issued by the Accountant General and payable at the Treasury. There is provision for a surcharge on any rates in arrears. The total rating yield has about doubled in the last five years and the estimate for 1960-1 is $93,500,000.
There are few exemptions, and premises used for education, charitable and welfare purposes are rated; but most of the bodies who run this kind of establishment receive back the amount of any rates paid in the form of direct subventions, or contributions towards rates, or refunds of all or part of the amount paid.
INTERNAL REVENUE
Tax on Earnings and Profits. Direct taxation of incomes was not introduced into Hong Kong until 1940 when the War Revenue