ENG-1969 — Page 70

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FINANCIAL STRUCTURE

The rates of duty are, in general, low, and on liquor they range from $1.60 per gallon, on Hong Kong brewed beer, to $73 a gallon for liquors and spirits of non-Commonwealth origin.

The scale of duties on imported tobacco ranges from $2.50 a pound for Chinese prepared tobacco to $11.25 a pound on non- Commonwealth cigars. Preferential rates are granted for unmanu- factured tobacco of Malawi origin and to cigars, cigarettes and pipe tobacco of Commonwealth manufacture.

For hydrocarbon oils the rate of duty ranges from two cents a pound for liquefied petroleum gas to $1.80 a gallon for motor spirits. On table waters and methyl alcohol duty is levied at the rate of 48 cents and $7.50 a gallon respectively.

RATES

Rates are levied on the basis of the annual letting value of land or a building held or occupied as a distinct or separate tenancy. The valuation list covers the rating areas of Hong Kong Island, Kowloon, New Kowloon and part of the New Territories. In Hong Kong Island, Kowloon and New Kowloon, rates are charged, with a few exceptions, at 17 per cent per annum of rateable value. In those parts of the New Territories which are statutorily subject to rates, the charge is 11 per cent. The valuation list is prepared by the Commissioner of Rating and Valuation and is frequently revised to bring it up to date. The estimated revenue from rates for 1969-70 is $300 million.

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There are few exemptions. Premises used for educational, charit- able and welfare purposes are rated, but most of the bodies running these establishments are reimbursed in the form of either direct subventions or contributions toward rates.

INTERNAL REVENUE

Income was first subject to direct taxation in Hong Kong in 1940 as a temporary war time measure but no attempt was made to collect tax after the liberation of the Colony, although the ordinance was not repealed until 1947. However, a new source of revenue was by then essential and it was decided to impose a direct tax on earnings and profits as a permanent measure with effect from