THE ECONOMY
66
In both the Urban Council and Regional Council areas, part of the rates charged is paid to the respective councils, the remainder being credited to the General Revenue Account. In 1989-90, the total net revenue from rates amounted to $5,377 million while the number of assessments increased from 1.04 million to over 1.1 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, new valuation lists are scheduled to take effect on April 1, 1991. Between general revaluations, the lists are regularly updated when new premises are built and 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 accordance 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.
The Inland Revenue Department is responsible for the collection of betting duty, entertainments tax, estate duty, hotel accommodation tax, stamp duty, and earnings and profits tax.
Betting duty is imposed on bets and on the proceeds of Mark Six lotteries. The rate of _duty is 10.5 per cent or 17 per cent of the amount of the bet, depending on the type of bet -placed, and 30 per cent on the proceeds of lotteries.
Entertainments tax is imposed on prices of admission to cinemas and to race meetings at rates which vary with the admission prices. These average about nine per cent in the case of cinemas and 28 per cent in the case of race meetings.
Estate duty is imposed on estates in Hong Kong. The rates of duty charged range from a minimum of six per cent on estates valued between $4 million and $4.5 million to a maximum of 18 per cent on estates valued in excess of $5 million. Estates valued at $4 million or less are exempt from duty.
Hotel accommodation tax of five per cent is imposed on expenditure on accommodation by guests in hotels and guest-houses.
The Stamp Duty Ordinance imposes fixed and ad valorem duties on different classes of documents relating to assignments of immovable property, leases and share transfers.
Earnings and profits tax are levied under the Inland Revenue Ordinance. In Hong Kong, persons liable to tax may be assessed on three separate and distinct sources of income, namely business profits, salaries, and income from property.
Profits tax is charged only on net profits arising in Hong Kong, or derived from a trade, profession or business carried on in Hong Kong. Profits of unincorporated businesses are currently taxed at 15 per cent and profits of corporations are taxed at 16.5 per cent. Tax is payable on the actual profits for the year of assessment. Tax is paid initially on the basis of profits made in the year preceding the year of assessment and is subsequently adjusted according to profits actually made in the assessment year. Generally, all expenses incurred in the production of assessable profits are deductible. There is no withholding tax on dividends paid by corporations and dividends received from corporations are exempt from profits tax.
Salaries tax is charged on emoluments arising in or derived from Hong Kong. The basis of assessment and method of payment are similar to the system for profits tax. Tax payable
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