XN000022-1974-06-18 — Page 8

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ALTERNATIVES TO RATING

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TUESDAY, JUNE 18, 1974

THE COMMISSIONER OF RATING AND VALUATION, MR. RAYMOND FRY, TODAY EXPRESSED INTEREST TO STUDY IN DETAIL A NUMBER OF ALTERNATIVES TO RATING SUCH AS A LOCAL INCOME TAX, SITE RATING AND CAPITAL VALUE RATING -- WHICH HAVE BEEN ADVOCATED IN BRITAIN DURING RECENT YEARS.

ADDRESSING A LUNCHEON MEETING OF THE KIWANIS CLUB, MR. FRY ADDED THAT IN THIS COMPUTERISED AGE THERE WERE, OF COURSE, MANY OTHER PUSSIBILITIES OPEN.

COMMENTING ON THESE NEW SYSTEMS, HE FELT THAT A LOCAL INCOME TAX WOULD NOT BE APPROPRIATE IN HONG KONG WHERE KATES ARE NOT, AS THEY ARE IN BRITAIN, LEVIED ON A LOCAL BASIS BY A NUMBER OF SEPARATE AUTHORITIES.

+SITE RATING IS AN INTERESTING SYSTEM PERHAPS KNOWN' TO SOME OF YOU, BUT IT IS REALLY OF MORE RELEVANCE WHERE THERE IS A NEED TO ENCOURAGE REDEVELOPMENT NOT USUALLY THE CASE IN HONG KONG,

+CAPITAL VALUE RATING IS BEING LOOKED AT IN BRITAIN MAINLY JECAUSE OF THE PAUCITY OF DOMESTIC RENTS, BUT IS NEVERTHELESS AN INTERESTING CONCEPT AND ONE WHICH, WITH INCREASING OWNER- OCCUPATION, MIGHT BE UNDERSTOOD BETTER BY SOME THAN OUR ANNUAL VALUE SYSTEM.+

ON RATING IN HONG KONG, THE COMMISSIONER DESCRIBED RATES AS AN OLD AND WELL-ESTABLISHED TAX WHICH STILL WORKS FAIRLY AND WELL IN THE LOCAL CIRCUMSTANCES.

+IT IS A VERY SURE TAX, ALMOST IMPOSSIBLE TO EVADE BECAUSE IT RELATES TO AN ACTUAL PIECE OF PROPERTY, AND IT IS NOT EXPENSIVE TO ADMINISTER OR COLLECT. IN REVENUE TERMS IT RANKS SECOND AFTER INLAND REVENUE AND TOTAL RATES THIS YEAR WILL EXCEED $650 MILLION.+

IN ADDITION, HE SAID THE COMMISSIONER OF INLAND REVENUE USED RATEABLE VALUES AS THE BASIS FOR COLLECTING 'PROPERTY TAX.

MR. FRY POINTED OUT THAT THE MAIN TASK OF HIS DEPARTMENT WAS TO CARRY OUT THE PROVISION OF THE RATING ORDINANCE. +BUT WE HAVE MANY OTHER TASKS, TOO THE JEST KNOWN OF WHICH IS, I SUPPOSE, RENT CONTROL.

+WE ALSO ACT AS AGENTS FOR GOVERNMENT IN THE RENTING OF OFFICE ACCOMMODATION AND QUARTERS FOR STAFF WE ARE GOVERNMENT 'S PRINCIPAL ADVISERS ON RENTAL MATTERS AND ARE CONSULTED BY ALL OTHER GOVERNMENT DEPARTMENTS REGARDING RENTS= WE ARE RESPONSIBLE FUR NUMBERING BUILDINGS AND WE ALSO WORK VERY CLOSELY WITH THE COMMISSIONER OF INLAND REVENUE ON PROPERTY TAX ASSESSMENTS, SCRUTINISE AND PROVIDE VALUATIONS IN STAMP DUTY TRANSACTIONS AND ASSIST IN OTHER TAX CASES INVOLVING THE VALUE OF

REAL PROPERTY.+

/MR, FRY