ENG-1950 — Page 38

Import and Excise Duties

There is no general customs tariff in Hong Kong, import duties being confined to liquor, tobacco, hydrocarbon oils, toilet prepara- tions, proprietary medicines, and table waters. A special foreign registration fee of 15% of the value of a motor vehicle is payable in respect of any vehicle not produced within the British Commonwealth. The duties on imported liquor range from $1.50 per gallon on beer to a minimum of $4 on Chinese liquor and to $44 on European sparkling wines. A reduction in duty is allowed in respect of liquors manufactured or produced within the British Commonwealth.

The duties on tobacco range from $3 per lb. on the lowest taxed Chinese-prepared tobacco to $7 per lb. on cigars. A reduction in duty is allowed on tobacco of Empire origin and/or of Empire manufacture. A duty of 80 cents per gallon is payable on all light oils imported into the Colony, 40 cents per gallon on all heavy hydrocarbon oils used as fuel for any heavy oil road vehicle, and 10 cents per gallon on other hydrocarbon oils. Duty is payable on toilet preparations and proprietary medicines at 25% of ex-factory price in the case of locally manufactured goods and 25% of f.o.b. prices in the case of imported goods. A duty of 48 cents per gallon is payable on table waters imported into the Colony. Excise duty is levied at the same rates on the above dutiable commodities manufactured in the Colony.

Earnings and Profits Tax

This tax, introduced for the first time in 1947, is based on the normal income tax plan modified in material respects to meet local conditions and is divided into four separate taxes, property tax, profits tax (sub-divided into corporation profits tax and business profits tax), interest tax and salaries and annuities tax.

If a person so chooses he may be assessed personally and so enjoy the personal allowances obtaining under the salaries and annuities tax of $7,000 for himself, $5,000 for his wife and a decreasing allowance for children up to the ninth. Tax is chargeable at a ratio of the standard rate (12% in 1950/51). The full rate is levied on corporations and on profits of unincorporated businesses earning over $7,000 (with marginal relief). Salaries and annuities tax, after allowances have been deducted, is levied at rates varying from one- fifth of the standard rate on the first $5,000 of chargeable income to twice the standard rate on chargeable income of over $45,000.

""

Revenue derived from the four taxes in 1949/50 together with amalgamated tax under personal assessment was as follows:-

Property tax

Profits tax:

Corporation profits tax Business profits tax

Salaries and annuities tax

Interest tax

Personal assessment

TOTAL:

$ 4,563,008

$20,369,992 8,250,743

28,620,735

4,058,512

1,437,551 137,790

$38,817,596

30