TNAG-2472-FCO40-3599-Confidential-talks-between-the-UK-and-China-regarding-financ-1992 — Page 31

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5

+ 852 868 5279

P.29

Paser b (P. 5 04 13.

The

variations of actual

revised

estimate

revenue from the

reflected in the "Works

Account" have a relatively small direct effect

on actual outturn.

(II) Operating revenue : earnings and profits tax and

stamp duty

1. Introduction

While

recurrent expenditure (which consists

mainly of personal emoluments and departmental expenses) is relatively easy to control and actual outturn continues to match the estimates

almost

exactly,

forecasts

of operating (recurrent) revenue are not susceptible to the same degree of pin-point accuracy, since a sudden rise or fall in the stock market prices and/or turnover, for example, and the consequent effect on revenue received, are by definition not predictable.

The difference between the original estimate ($95.8 billion) and the actual operating revenue ($99.9 billion) was, nevertheless, only 4.4% in

1991-92 and the variation between the revised

estimates and actual operating revenue has been minimal for each of the past five years.

2. Internal revenue (excluding estate duty)

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This

with

represents about 63% of operating revenue earnings and profits tax accounting for 43%

in 1991-92.