ENG-1957 — Page 88

72

HONG KONG ANNUAL REPORT

Loans from Her Majesty's Government in the United Kingdom amounted to $20,574,720. Of this sum, $19,925, 120 is the amount received up to 31st March, 1957, against the $48,000,000 loan which has been promised by Her Majesty's Government in connexion with the development of Kai Tak Airport. The other loan, amounting to $649,600, is made under Colonial Development and Welfare Scheme D. 1967– Loans to Fishermen for Mechanization of Craft. Of this, $630,166 has already been issued to fishermen. Details of Colonial Development and Welfare grants and loans are given in Appendix I.

TAXATION

Tax on Earnings and Profits: There was no direct taxation on incomes in Hong Kong until 1940 when the War Revenue Ordinance, 1940, was enacted 'for the purpose of raising funds by way of a tax on incomes to assist His Majesty's Government in the prosecution of the War.' When the Colony was liberated in August 1945, the objective of the war-time legislation had been removed and no attempt was made to re-establish the administration of that temporary

measure.

In 1947, when the Colony was in urgent need of revenue, it was decided to introduce some measure of taxation on incomes in a more permanent form and the Inland Revenue Ordinance was then enacted. The aim of this legislation has been simplicity in operation, the principle of taxation at source rather than that of obligatory individual assessment being adopted.

The scope of charge under the Inland Revenue Ordinance is limited to incomes and profits arising in or derived from the Colony. The Ordinance imposes four separate taxes which cover the various types of chargeable incomes and profits. They are Property Tax, Salaries Tax, Profits Tax and Interest Tax. The overseas income of a Hong Kong resident, whether remitted to the Colony or not, is not liable to tax.