FINANCIAL SYSTEM AND ECONOMY
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and profits, normally taxed at 15 per cent on each separate source, may voluntarily elect to be assessed on total Hong Kong income. In addition to the allowances and sliding scale of rates applicable to salaries tax, any business loss is deductible before arriving at the amount on which tax is payable. The advantages of personal assessment disappear when tax at the sliding scale on the amount taxable exceeds tax at the standard rate on total income (before allowances).
Taxes on earnings and profits, after allowing for the cost of the 1981 Budget tax concessions, are estimated to yield $8,923 million in the 1981-2 financial year compared with actual collections of $7,965 million for 1980–1.
Stamp Duty
The Stamp Duty Ordinance imposes fixed and ad valorem duties on different classes of documents relating to assignments of immovable property, leases and share tansfers. In recognition of the rising values of domestic premises, the 1981 Budget raised the platforms to which the fixed and concessionary rates of duty apply on conveyances of low and intermediate value properties. Assignments are presently chargeable at a fixed duty of $20 for the lowest range of values (up to $250,000), one per cent for the intermediate range ($250,000 to $500,000) and two and three quarters per cent for those in excess of $500,000, with provision for marginal relief at the commencement of higher rates. Lease premia attract ad valorem duty at two and three quarters per cent; the rates of duty on lease rents vary with the periods of leases. Share transactions require the preparation of contract notes on which buyers and sellers each have to pay duty at the rate of $3 per $1,000 in value. The estimated yield is $1,145 million for the financial year 1981-2 compared with actual collections of $2,052 million for 1980-1.
Finance and Economy
Duties
There is no general tariff on goods entering Hong Kong but duties are charged on four groups of commodities - alcoholic liquors, tobacco, certain hydrocarbon oils and methyl alcohol – irrespective of whether they are imported or manufactured locally. All firms en- gaged in the import, export, manufacture or sale of dutiable commodities must be licensed. On liquors, the basic duty rates are in equivalence from $0.60 a litre on Hong Kong brewed beer to $27.06 a litre on brandy. On tobacco, rates range in equivalence from $8.16 a kilogram on Chinese prepared tobacco to $44.42 a kilogram on cigarettes. Rates on hydrocarbon oils are $0.50 a litre on motor and aircraft spirits and $0.35 a litre on diesel fuel for motor vehicles. The rate for methyl alcohol is equivalent to $2.18 a litre.
Rates
Rates are levied on the occupation of landed property at a percentage of the assessed rateable value which is, briefly, the annual rent at which the property might reasonably be expected to be let. Because no review of rateable values has been carried out since the present valuation lists came into force on April 1, 1977, current rateable values are considerably below current market rental levels.
The percentage rate charge is determined annually by resolution of the Legislative Council and since April 1, 1977, general rates at seven and a half per cent of the rateable values of tenements and Urban Council rates at four per cent of the rateable values have been charged in the urban areas. General rates at percentages below 11 per cent are