THE ECONOMY
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Urban Council area (Hong Kong, Kowloon and New Kowloon) and in the Regional Council area (New Territories). Additional income derives from fees and charges for the services the councils provide. The government has agreed to provide a grant of $273.6 million per annum to the Regional Council for three years from 1988–9 to 1990–1 to enable the council to finance all new projects in its capital works programme.
The Housing Authority, operating through the Housing Department, is also financially autonomous. Its income is derived mainly from rents. If the authority's cash flow is inadequate to meet the construction costs of new estates, it may request an injection of capital by the government. The authority is provided with land on concessionary terms for the construction of rental housing. Part of the authority's recurrent expenditure, for such activities as clearances and squatter control, is financed from the General Revenue Account. The authority is also responsible for carrying out a programme of squatter area improvements which are funded from the Capital Works Reserve Fund.
Revenue Sources
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Duties are levied on six groups of commodities hydrocarbon oils, alcoholic liquor, methyl alcohol, tobacco, non-alcoholic beverages and cosmetics. The Customs and Excise Department is responsible for collecting and protecting duty revenue. The Dutiable Commodities Ordinance imposes controls on the import, export, manufacture, sale and storage of dutiable items. In 1988-9, $4,173 million was collected in duties, compared with $3,389 million in 1987-8.
Specific duty rates on alcoholic liquors range from $1.45 a litre on cider and perry to $52 a litre on brandy. In addition, duty is payable at the rate of 30 per cent of the c.i.f. value of spirits and 20 per cent of the c.i.f. value of wines. On tobacco, duties range from $50 a kilogram on Chinese-prepared tobacco to $190 per 1 000 cigarettes. On motor and aircraft fuels the duty is $2.75 a litre, and on diesel oil for road vehicles it is $1.37 a litre. Duty is levied on methyl alcohol at a rate of $4.90 a litre, and on non-alcoholic beverages at $60 a hectolitre. On cosmetics there is a duty at 25 per cent of the c.i.f. price of imported products and the wholesale price of locally-manufactured products.
Rates are a tax on the occupation of landed property. They are charged at a percentage of the rateable value of property, which is an estimate of the annual rent at which the property might reasonably be expected to let. The percentage charge is fixed annually by the Legislative Council. For 1989-90, the charge is six per cent.
In the Urban Council area, part of the rates charged is paid to the Urban Council, the remainder being credited to the General Revenue Account. All revenue from rates in the New Territories is paid to the Regional Council. In 1988–9 the total net revenue from rates amounted to $4,812 million, while the number of assessments increased from 0.97 million to over 1 million.
The current lists of rateable values, based on rental values as at October 1, 1986, came into force on April 1, 1988. With the commitment to conducting revaluations on three-year cycles, work has commenced on preparing new valuation lists which are scheduled to take effect on April 1, 1991. In between general revaluations, the lists are regularly updated as new premises are built and as existing premises are altered or demolished.
Rates are payable quarterly, in advance. Exemptions are few, although the government generally provides financial assistance towards payment of rates to non-profit-making educational, charitable and welfare organisations if their premises are being run in accord- ance with approved guidelines. No refund of rates is allowed for vacant domestic properties but half the rates paid may be refunded in the case of unoccupied non-domestic properties.