THE ECONOMY
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generous personal allowances under Hong Kong tax law, about 63 per cent of the SAR's workforce had no salaries tax liability at all.
Owners of land or buildings in Hong Kong were charged property tax in 2001-02 at the standard rate of 15 per cent of the actual rent received, less an allowance of 20 per cent for repairs and maintenance. There is a system of provisional payment of tax similar to that for profits tax and salaries tax. Property owned by a corporation. carrying on a business in Hong Kong is exempt from property tax (but profits derived from ownership are chargeable to profits tax). Receipts from property tax accounted for about 1 per cent of total revenue, or about $1.1 billion in 2001-02.
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. The revenue from stamp duties accounted for about 5 per cent of total revenue, or about $8.6 billion, in 2001-02.
A duty is imposed on bets on horse racing administered by the Hong Kong Jockey Club and on the proceeds of Mark Six lotteries the only legal forms of betting in Hong Kong. In 2001-02, the rate of duty was 12 per cent or 19 per cent on betting proceeds (depending on the type of bet placed) and 25 per cent on the proceeds of lotteries. The yield in 2001-02 totalled some $11.6 billion, and accounted for about 7 per cent of total revenue.
In 2001-02, estate duty was imposed on estates valued at over $7.5 million, at levels ranging from 5 per cent to a maximum of 15 per cent, while a hotel accommodation tax of 3 per cent was imposed on expenditure on accommodation by guests in hotels and guesthouses.
Under the Dutiable Commodities Ordinance, duties are levied on only four types of commodities - hydrocarbon oil, alcoholic beverages, other alcohol products (i.e. methyl and ethyl alcohol) and tobacco products, both locally manufactured and imported. The Customs and Excise Department is responsible for collecting these duties. In 2001-02, the department collected duties worth $7.0 billion or about 4.5 per cent of total revenue.
The Rating and Valuation Department is responsible for the billing and collection of rates, which are levied on landed properties at a specified percentage of their rateable value. For the 2002-03 financial year, the rates percentage charge is 5 per cent. The revenue raised provides a stable and reliable revenue stream for the Government.
The rateable value of a property is an estimate of its annual rent in the open market as at a designated date. In order to better reflect prevailing market rents, revaluation of rateable values is now conducted on an annual basis. The current Valuation List took effect on April 1, 2002 with rateable values reflecting rental values at October 1, 2001. The Valuation List as at March 31, 2002 contained about 1 997 000 assessments. In 2001-02, the revenue from rates was $12.7 billion, accounting for about 7 per cent of total revenue.
As an economic relief measure, a one-off concession was granted to all ratepayers with effect from January 1, 2002. The concession was equivalent to the actual rates payable for each rateable tenement in the 12-month period starting from the date, subject to a maximum of $2,000. A further rates concession up to a maximum of $3,000 was granted for each ratable tenement for the nine-month period starting from