ENG-1963 — Page 95

PUBLIC FINANCES

67

on a sliding scale. The privilege of election is not available to non- residents.

The standard rate of tax has remained unchanged at 12 per cent since 1950. Business profits, interest received from loans and the interest element of purchased annuities are charged to tax at the full standard rate. However where the profits of a non- corporate business are below $7,000 for any year no tax is charged and tax chargeable on such businesses is restricted to one-half of the amount by which the profits exceed $7,000. Property Tax is charged on the net rateable value of any land or building in the Colony with the exception of those situated in the New Territories and those wholly occupied by the owner as his residence. Up to and including the financial year 1960-1 Property Tax was charged at half the standard rate. An amendment made at the end of March 1961 increased this charge to the full standard rate for properties where the rent is not controlled by reference to the 1941 rentals. Salaries Tax is charged on the total income from employment reduced by allowances which are at present: allowance for tax- payer, $7,000; allowance for taxpayer's wife, $7,000; allowance for children, from $2,000 for each of the first two children down to $200 for the ninth child. Premiums paid for life insurance are allowed to an amount not exceeding one-sixth of the amount by which the income exceeds $7,000. Tax is charged on a scale which begins at one-fifth of the standard rate on the first $5,000 of the net income and rises by one-fifth of the standard rate on each subsequent $5,000 until, at $45,000, the maximum of twice the standard rate is reached. The total Salaries Tax payable by any individual is restricted to an amount not exceeding the standard rate on his gross salary.

It is estimated that the revenue from Earnings and Profits Tax during the financial year 1963-4 will be $223 million.

Estate Duty. This was first introduced in 1931 and generally follows the lines of the tax having the same name in the United Kingdom. Duty is assessed only on that part of an estate which is in Hong Kong, no charge being made in respect of estates out- side the Colony. The rates of duty range from two per cent on estates valued between $100,000 and $200,000 to 40 per cent on estates over $15 million. Yield for the year ending on 31st March 1964 is estimated at $16 million.