XN000022-1978-01-11 — Page 18

WEDNESDAY, JANUARY 11, 1978

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TAX ON NON-PROFIT MAKING CLUBS

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THE GOVERNMENT DOES NOT BELIEVE THAT INCREASES IN PROPERTY TAX PAYABLE BY SOME NON-PROFIT-MAKING SPORTS AND RECREATION CLUBS HAVE CAUSED +GRAVE ADVERSE EFFECTS+, THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, TOLD THE LEGISLATIVE COUNCIL TODAY.

REPLYING TO A QUESTION FROM THE HON. CHARLES YEUNG, MR. HADDON- CAVE AGREED THAT THE INCREASES IN THE ASSESSABLE VALUES FOR SPORTS AND RECREATION CLUBS RANGED FROM FIVE TIMES TO A LITTLE OVER

20 TIMES, BUT POINTED OUT THAT THE GENERAL RUN OF INCREASES DID NOT EXCEED 10 TIMES,

+! MIGHT ADD THAT THE NUMBER OF CLUBS WHICH MAY, AS A RESULT BE LIABLE FOR TAX AT OVER $100,000 PER ANNUM IS VERY, VERY SMALL INDEED, AND I ONLY KNOW TWO CASES,+ HE SAID.

+AND IT IS, OF COURSE, OPEN TO A CLUB TO OBTAIN EXEMPTION FROM PROPERTY TAX BY ENSURING THAT LESS THAN HALF OF ITS INCOME IS DERIVED FROM VOTING MEMBERS ALTHOUGH IT WILL THEREBY BECOME LIABLE TO PROF ITS TAX FOR IT WILL NO LONGER BE REGARDED BY THE INLAND REVENUE DEPARTMENT AS A PRIVATE CLUB, HE ADDED.

REFERRING TO A POSSIBLE MISCONCEPTION, THE FINANCIAL SECRETARY POINTED OUT THAT PROPERTY TAX WAS NO LONGER CHARGED ON RATEABLE VALUES.

+SINCE 1976-77 PROPERTY TAX HAS BEEN CHARGED ON QUITE SEPARATE ASSESSABLE VALUES, THAT IS TO SAY, VALUES WHICH, GENERALLY, ARE FIXED IN LINE WITH CURRENT MARKET RENTALS, BUT WHICH ALSO REFLECT THE EFFECTIVE RESTRICTIONS PROVIDED FOR UNDER THE LANDLORD AND TENANT (CONSOLIDATION) ORDINANCE, HE SAID.

MR, HADDON-CAVE ADDED THAT THE REASON FOR THE INCREASES WAS THAT PREVIOUS ASSESSMENTS WERE BASED ON AN OUTDATED RATING FORMULA WHICH HAD NOT BEEN REVISED FOR MANY YEARS.

WITH THE CHANGE-OVER FROM RATEABLE VALUES TO ASSESSABLE VALUES AS THE BASIS FOR PROPERTY TAX, VALUES HAD TO BE CALCULATED ON CURRENT MARKET VALUES IN ACCORDANCE WITH THE INLAND REVENUE ORDINANCE, HE ADDED.

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