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The Economy
2020-21). The rateable value of a property is an estimate of its annual open market rent at a designated date. Rateable values are reviewed each year to better reflect prevailing market. rents. The current Valuation List, containing about 2.6 million assessments, took effect on 1 April 2020, with rateable values reflecting rental values on 1 October 2019. The revenue from rates in 2019-20 was about $21 billion, or 3.6 per cent of total government revenue.
The Rating and Valuation Department is also responsible for the billing and collection of government rent for properties held under land leases granted on or after 27 May 1985, or on the extension of non-renewable land leases. Government rent is levied at 3 per cent of the rateable value of the property and is adjusted in step with any subsequent changes in the rateable value. There were about two million assessments in the Government Rent Roll on 1 April 2020. Total government rent collected in 2019-20 was around $13.3 billion, or 2.3 per cent of total government revenue.
Under the Dutiable Commodities Ordinance, excise duties are levied on four commodities to be consumed locally, namely hydrocarbon oil, liquor, methyl alcohol and tobacco, irrespective of whether they are manufactured locally or imported. The Customs and Excise Department collects these duties, which totalled $11.4 billion in 2019-20, or 1.9 per cent of total government revenue, of which 61.9 per cent was from tobacco, 33.1 per cent was from hydrocarbon oil, 4.9 per cent was from liquor, and 0.1 per cent was from methyl alcohol and other alcohol products.
All motor vehicles imported for use on roads are subject to first registration tax under the Motor Vehicles (First Registration Tax) Ordinance. The Customs and Excise Department assesses the taxable value of vehicles to facilitate the Transport Department's collection of this tax, which totalled $7.2 billion in 2019-20, or 1.2 per cent of total government revenue.
It is government policy that fees charged by the government should in general be set at levels adequate to recover the full cost of providing the goods or services. Certain essential services are subsidised by the government or provided free of charge. Fees and charges for goods and services provided by the government generated about $12.1 billion, or 2.1 per cent of total revenue, in 2019-20. Government-operated public utilities generated about $3.9 billion, or 0.7 per cent of total revenue, the most important of which, in revenue terms, is the provision of water supplies.
Land transactions generated some $141.7 billion, or 24 per cent of total government revenue, in 2019-20. All revenue from land transactions is credited to the Capital Works Reserve Fund to finance the Public Works Programme.
Tax Treaties and International Tax Cooperation
Hong Kong strives to expand its network of comprehensive avoidance of double taxation. agreements (CDTAs) to improve the business environment and facilitate the flow of trade, investment and talent with the rest of the world. The 45 CDTAs signed by the city as at end-2020 help reduce tax burdens on taxpayers and eliminate uncertainties over tax liabilities.
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