42
FINANCIAL SYSTEM AND ECONOMY
million occurred, and 1974–5 when there was a deficit of $380 million. In 1981-2 a surplus of $7,092 million was obtained, and for 1982-3 a surplus of $2,783 million has been budgetted. However, this is now unlikely to be achieved. Detailed breakdowns of revenue by source are given at Appendices 7 and 7a, and of expenditure by function at Appendices 8 and 8a. A comparative statement of recurrent and capital revenue and expenditure is given at Appendix 9.
The accumulated net surpluses on the General Revenue Account form the government's fiscal reserves, and these secure the government's contingent liabilities and ensure that it is able to cope with any short-term tendency for expenditure to exceed revenue or for revenue yields to fall below expectations. At March 31, 1982, the accumulated reserves stood at about $22,571 million. At the same date the public debt amounted to $245 million.
Duties
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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 engaged in the import, export, manufacture or sale of dutiable commodities must be licensed.
On liquors, the basic duty rates are in equivalence from $0.37 a litre on Hong Kong brewed beer to $27.05 a litre on brandy. On tobacco, rates range in equivalence from $8.15 a kilogram on Chinese prepared tobacco to $44.45 a kilogram on cigarettes. Rates on hydrocarbon oils are $1.20 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 $2.20 a litre. A statement of revenue from duties is given at Appendix 10.
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 let.
The percentage rate charges are determined annually by resolution of the Legislative Council. For 1982–3, general rates are charged at three and a half per cent of the rateable values of tenements and Urban Council rates at eight per cent of rateable values in the urban areas. The total rates currently charged in the urban areas are therefore 11 per cent of rateable values. General rates at percentages below 114 per cent are charged in the New Territories. No Urban Council rates are levied in the New Territories because the council has no jurisdiction there.
Rates are payable quarterly in advance and exemptions are few. However, the govern- ment generally provides financial assistance towards the payment of rates to educational, charitable and welfare organisations if the premises they occupy are being run in accordance with an approved target or policy. No refund of rates is allowed for vacant domestic premises, but half of the rates paid may be refunded in the case of vacant non-domestic premises. The estimated rates revenue for 1982–3 is $1,650 million, of which about $950 million will go to the Urban Council.
Internal Revenue
The Inland Revenue Department collects the taxes, duties and fees making up the internal revenue. These consist of betting duty, business registration fees, entertainments tax, estate duty, hotel accommodation tax, earnings and profits tax, and stamp duty. In the financial