WEDNESDAY, FEBRUARY 16, 1977
3
(2) THE FACT THAT OF THE PROPERTY TAX CHARGED, A LARGE
PROPORTION IS EVENTUALLY EITHER DISCHARGED OR REFUNDED EACH YEAR BECAUSE OF THE PROVISIONS FOR RELIEF IN THE ORDINANCE.
(3) THE EXISTING SYSTEM INVOLVED A MULTIPLICITY OF ASSESSMENTS
WHERE PROPERTY OWNERS OWNED SEVERAL PROPERTIES. THIS MULTIPLICITY ALSO AFFECTED THE FOLLOW-UP ACTION OF THE COLLECTION OF A TAX. THE COMMITTEE NOTED THAT IN RELATIVE TERMS THE ARREARS OF PROPERTY TAX FAR EXCEED THE ARREARS OF OTHER TAXES.
(4)
A REVENUE LOSS OF SUBSTANTIAL PROPORTIONS WHERE REVALUATIONS DID NOT OCCUR ON AN ANNUAL BASIS. THEY NOTED THAT THERE WAS ALREADY A BUILT-IN LOSS IN THE SYSTEM BECAUSE PROPERTY TAX IS BASED ON THE ESTIMATED NET RENT ON THE FIRST DAY OF THE YEAR OF ASSESSMENT AND THEREFORE IN EFFECT REFLECTED THE INCOME OF THE PREVIOUS
YEAR. THIS MEANT THAT THERE IS A PRIVILEGED BAND OF TAXPAYERS PAYING LESS THAN THE STANDARD RATE OF TAX. THESE TAXPAYERS ARE IN A FAVOURABLE POSITION VIS-A-VIS CORPORATIONS WHO PAY TAX ON THE ACTUAL NET RENT RECEIVED DURING THE YEAR.
(5) THE LARGE NUMBER OF OBJECTIONS THAT ARE CURRENTLY BEING
GENERATED FOLLOWING THE INTRODUCTION OF VALUES WHICH ARE DIFFERENT FROM RATEABLE VALUES.
AFTER CONSIDERING VARIOUS ALTERNATIVE REMEDIES, THE COMMITTEE RECOMMENDED THAT THE ACTUAL NET RENTAL SHOULD BE INCLUDED IN THE RETURN OF TOTAL INCOME MENTIONED EARLIER. IT NOTED THAT IF THIS WAS DONE THE NOTIONAL ATTRIBUTION OF RENT WHICH OCCURS IN THE CASE OF NON-RENTAL PRODUCING PROPERTY, FOR EXAMPLE, CLUB PREMISES, ANCESTRAL PROPERTIES IN THE NEW TERRITORIES, SECOND HOMES OCCUPIED AS RESIDENCES ETC., WOULD AUTOMATICALLY FALL AWAY. ONE SIDE EFFECT OF THIS RECOMMENDATION IS THAT TENANTS AS OPPOSED TO OWNERS, WOULD HAVE NO LIABILITY UNDER THE ORDINANCE. AT PRESENT THE TAX IS COLLECTED, IN THE FIRST INSTANCE FROM THE RATEPAYER, WHETHER HE IS THE OWNER OR THE TENANT.
3.
THAT THE PLAN TO INTRODUCE A DIVIDEND WITHHOLDING TAX SHOULD
BE ABANDONED BUT THAT THE TAX RATE ON CORPORATE PROF ITS SHOULD
CONTINUE TO BE ONE OR TWO PERCENTAGE POINTS HIGHER THAN THE STANDARD
RATE.
/THE COMMITTEE