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The Economy
In a review announced in September 2014 of the property tax administrative practices of 76 jurisdictions by the USA's Council On State Taxation and Canada's International Property Tax Institute, Hong Kong (with an 'A-') was the only jurisdiction to receive an 'A' grade. The review focused on three major areas essential for fair and efficient property tax administration: transparency, simplicity and consistency, and procedural fairness.
Fees and charges for services provided by government departments generated about $12 billion, or about 3 per cent of total revenue, in 2013-14. It is government policy that fees should in general be set at levels sufficient to recover the full cost of providing the services. Certain essential services are, however, subsidised by the government or provided free of charge. Government-operated public utilities generated about $3.9 billion, which accounted for about 1 per cent of total revenue; the most important of these, in revenue terms, is provision of water supplies.
The government also collected $37 billion from investments and interest income on its fiscal reserves in 2013-14, amounting to about 8 per cent of total government revenue.
Lastly, some $84.3 billion, or about 19 per cent of total government revenue in 2013-14, was generated from land transactions. All revenue from land transactions is credited to the Capital Works Reserve Fund to help finance the Public Works Programme.
Network of Tax Treaties and International Tax Cooperation
Comprehensive agreements for the avoidance of double taxation (CDTAs) with major economies help improve the business environment and facilitate flows of trade, investment and talent between Hong Kong and the rest of the world. They help reduce tax burdens on individuals and enterprises and eliminate uncertainties over tax liabilities. They also enhance Hong Kong's position as an international business and financial centre. By the end of 2014, Hong Kong had signed 32 CDTAs, including three in 2014.
In 2013, the government further enhanced the exchange of information arrangements under CDTAs and put in place a legal framework to enter into tax information exchange agreements with other jurisdictions when necessary. By the end of 2014, Hong Kong had signed seven such agreements.
In September 2014, Hong Kong indicated to the Organisation for Economic Cooperation and Development (OECD) it would implement the new global standard on automatic exchange of financial account information on tax matters to enhance tax transparency and combat cross- border tax evasion. Subject to enactment of the necessary domestic legislation by 2017, Hong Kong will commence the first automatic information exchanges by the end of 2018 (the OECD's required timeline), on a reciprocal basis with appropriate jurisdictions.
Government Procurement
Hong Kong, China is a signatory to the Agreement on Government Procurement of the World Trade Organisation (WTO GPA). Government procurement is undertaken in accordance with the principles of openness, transparency, fairness, public accountability, value for money and non-discrimination, Open tender procedures are widely used. Restricted or single tender
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