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FINANCIAL STRUCTURE
a sliding scale, granting reduced rate reliefs. The privilege of election is not available to non-residents. There is no tax on dividends distributed by corporations.
The standard rate of tax was raised to 15 per cent from April 1, 1966, having stood at 124 per cent for the previous 15 years. Business profits, interest received from loans and the interest element of pur- chased annuities are charged to tax at the full standard rate. However, where the profits of a non-corporate business are below $7,000 for any year, no tax is charged and tax chargeable on such a business is restricted to one-half of the amount by which the profits exceed $7,000. Property Tax is charged on the net rateable value of any land or building in the Colony with the exception of those in the New Territories and those wholly occupied by the owner as his residence. If the rent receivable is controlled by reference to the 1941 rental, the charge is at one-half of the standard rate, otherwise tax is payable at the full standard rate. Salaries Tax is charged on the total income from employment reduced by allowances which are at present: for the taxpayer, $7,000; for his wife, $7,000; for each of the first two children, $2,000; for each of the third to sixth children, $1,000; and for each of the seventh to ninth, $500. This makes a maximum allowance for children of $9,500. Premia-paid for life insurance are allowed to an amount not exceeding one-sixth of the amount by which the income exceeds $7,000. Tax is charged on a scale starting at 23 per cent on the first $5,000 of the net income and increasing at each subsequent $5,000 stage until at $45,000 the maximum rate of 30 per cent is reached. The total Salaries Tax payable by any individual is restricted to an amount not exceeding the standard rate on his gross income, that is to say 15 per cent.
It is estimated that the revenue from Earnings and Profits Tax during the financial year 1968-9 will be $523 million.
Estate Duty generally follows the lines of the British tax of the same name. Duty is assessed only on that part of an estate which is in Hong Kong. The rates of duty range from three per cent on estates valued between $100,000 and $200,000 to 25 per cent on estates over $4 million. Yield for the year ending March 31, 1969 is estimated at $18 million.
Stamp Duty is modelled on the British pattern and fixed duties are charged on various documents. The lowest is 15 cents on bills