34
FINANCIAL STRUCTURE
$1,000 and for each of the seventh to ninth child $500. This makes a maximum allow- ance for children of $9,500. There is also an allowance for any premium on a contract of life insurance on the life of the taxpayer or his wife, limited to 10 per cent of the capital sum expressed in that contract; and for contributions to an approved Widows and Orphans Scheme: the total of this allowance must not exceed one-sixth of the amount by which total income exceeds $7,000. There is an allowance of $2,000 for a dependent parent resident in Hong Kong and an allowance of $3,000 for a working wife. The sliding scale of tax starts at 24 per cent on the first $5,000 of net chargeable income and increases by 21 per cent for each subsequent stage of $5,000 up to $55,000 of net chargeable income when a rate of 30 per cent is applied with a subsequent limitation that the total salaries or personal tax charged cannot exceed 15 per cent of
gross income. At the bottom end of this scale there is a further low income relief giving additional allowances up to $3,600.
It is estimated that revenue from Earnings and Profits Tax during the financial year 1972-3 will be $1,019 million.
Estate Duty is imposed on that part of a deceased person's estate which is situated in Hong Kong. With effect from April 1, 1972 the rates of duty range from five per cent on estates valued between $200,000 and $300,000 to 15 per cent on estates valued in excess of $1 million. Estates valued at less than $200,000 are exempt from duty. Yield for the year ended March 31, 1973 is estimated at $33 million.
Stamp Duty is modelled on the British system which imposes specified duties on certain classes of documents and ad valorem duty on others. The lowest fixed duty is 15 cents on bills of lading and receipts and the highest is $20 on deeds. The ad valorem duty ranges from 25 cents per $1,000 to $2 per $100. There is a fixed duty of $20 on an instrument conveying title to land where the sale price does not exceed $20,000. The duties for conveyances of land in excess of $20,000 are—(a) one per cent where sale price exceeds $20,000 but is less than $40,000, and (b) two per cent where sale price exceeds $40,000. There is provision for marginal relief at the com- mencement of the higher rates. There is also an ad valorem duty of two per cent payable on lease premia. No architect, registered dentist, medical practitioner, pharmaceutical chemist or authorised auditor may practise unless he is in possession of a valid and current certificate to practise which must be renewed annually on payment of the prescribed stamp duty of $50 for every calendar year or part of a year. The estimated yield from stamp duty during 1972-3 is $395 million.
Entertainments Tax is imposed on the price of admission to cinemas and race meetings. The rate varies with the amount charged for admission and averages approximately 22 per cent. Certain cinema shows given for philanthropic, charitable or educational purposes are taxed at the lower rate or may be exempt. The antici- pated revenue from this tax for 1972-3 is $34.7 million.
Betting Duty is imposed on bets made on authorised totalisator or pari mutuels and on contributions or subscriptions towards authorised cash-sweeps. The duty is 7 per cent on bets and 25 per cent on cash-sweep contributions and is assessed from