72
COMPARISON OF REVENUE & EXPENDITURE
2. The following figures show how the actual revenue and expenditure totals compare with the approved Estimates for the year and with the revenue and expenditure figures for the previous year, the latter being quoted in brackets.
Estimates
Actual
$
Revenue Expenditure
Surplus
180,151,370 (151,407,950) 264,250,543 (194,933,955) 179,924,312 (150,284,105) 182,121,726 (159,954,023)
82,128,817 ( 34,979,932)
119,658
{ 100,355)
227,058 ( 1,123,845)
Less Net Depreciation of Investments (Add Net Appreciation of Investments)
Total Surplus for the year
$82,009,159 ($35,080,287)
Increase $
84,099,178 (43,526,005) 2,197,414 ( 9,669,918)
81,901,759 (38,856,087)
As will be seen from the above figures revenue exceeded expec- tations by $84,099,173 and exceeded expenditure by $82,128,817, expenditure being $2,197,414 in excess of the Estimates. From the net excess of $82,128,817 must be deducted the net deprecia- tion arising from the revaluation of investments at the middle market prices ruling on the 31st March 1950, making the actual surplus on the year's transactions $82,009,159. The General Revenue Balance of the Colony which stood at $72,143,683 at the 1st April 1949 had thus been increased to $154,152,842 by the 31st March 1950. In considering these figures, however, it should be borne in mind that during the year expenditure amounting to $21,782,309 was charged to "Advances pending raising of Loan" and that the total sum charged to this account by the 31st March, 1950, was $59,434,977. Were the General Revenue Balance to be reduced by the latter figure the net surplus to date would be $94,717,865.
REVENUE
3. The figures in the preceding paragraph show that in the event the total revenue amounting to some $264 millions exceeded the estimate by over $84 millions. There are a number
of reasons for this large and unexpected excess. The prepara- tion of the Annual Budget is begun and completed some con- siderable time in advance of the commencement of the financial year to which it relates and at the time the Estimates for 1949/50 were prepared the political horizon was very stormy in its outlook. Events in China had reached a stage of crisis and it was impossible to foretell what the repercussions on the Colony's trade and finances generally were going to be. The revenue for the previous year had been unexpectedly high but there was no guarantee that revenue collections would con- tinue at such levels. Even so a substantial increase over the previous year's estimate was budgeted for.
4.
3
One of the results of the upheaval in China was a very large increase in the population of Hong Kong. Moreover, many of the people who sought refuge in the Colony were wealthy industrialists and as a result a number of new factories were started and there was a general stimulus to the trade and prosperity of Hong Kong. A considerable number of these immigrants have since returned to China but the return trend had not become apparent by the 31st March last. This tem- porary increase in the population had its effect on a number of the heads of revenue, the effect being particularly noticeable in the case of duties, taxes, postal receipts, and royalties from Public Transport Companies. The biggest increases, both in amount and percentage, were in the revenue from duties on tobacco and hydrocarbon oils. In the former case, the large increase was due to a tendency which developed to pay local duty on consignments which normally would pass through the Colony in bond. This was the result of the unsettled conditions prevailing and of the interruption in the normal distribution of cigarettes from the factories in Shanghai. The Colony also benefited by the efficient operations of the Preventive Branch, and the net revenue from forfeitures was considerable. The revenue derived from the Public Transport Companies and the Kowloon/Canton Railway reached its peak towards the end of January. Other items of revenue affected by the increase of population and the capital brought into the Colony are the taxes on bets and sweepstakes, Entertainment Taxes and Stamp Duties.
5. Below is given a table showing how revenue collec- tions under the main heads compare with the Estimates. Actual revenue figures for 1948/1949 are given in brackets.
1. Duties
2.
Assessed Taxes
3. Internal Revenue
Actual $68,797,063 ($ 41,111,284) 19,286,843 ( 14,984,710) 72,580,925 ( 70,613,071) 13,292,710 ( 18,195,026) 22,677,689 ( 14,342,833) 7,657,050 ( 6,312,940) 12,235,441 ( 9,325,006) 7,678,671 ( 7,000,944)
Increase +
--
от Decrease +$34,547,063
+ 3,770,543 + 11,055,925 + 6,695,510 + 8,914,989 + 2,785,260 + 4,635,441 + 2,034,671
Estimate
4.
Licences, Fines & Forfeitures
$ 34,250,000 15,516,300 61,525,000 6,697,200
5.
Fees of Court or Office
13,762,700
6. Water Revenue
7. Post Office
4,871,800 7,600,000
8. Kowloon-Canton Railway
5,644,000
10.
9. Revenue from Land Rents
etc. Miscellaneous Receipts
...
8,868,100
5,424,790
11. Colonial Development &
Welfare Grants
2,431,480
13.
12. Grant from U.K.
Government Land Sales
16,000,000
7,690,572 ( 5,247,849) 10,553,677 ( 6,785,105)
1,018,400 ( 215,559)
16,000,000
—
1,418,080
2,560,000
4,786,502 ( 5,899,829)
Totals
$180,151,370
$264,250,543 ($194,933,955)
+ 3,822,472 +5,128,887
-+ 2,226,502
+85,617,253 1,418,080
$84,099,178
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