ENG-1969 — Page 73

FINANCIAL STRUCTURE

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Sweeps Tax imposes 74 per cent on totalisator receipts and 25 per cent on cash sweepstake receipts.

The Hotel Accommodation Tax, introduced in July 1966, pro- vides money for the promotion of tourism. The rate of tax is two per cent of the charge made for accommodation by the proprietor of any hotel containing 10 or more rooms normally available for guests. This levy is estimated to yield $3.1 million in the current

year.

Every business carried on in the Colony except one which is not carried on for the purpose of gain or one which is carried on by a charitable institution must be registered and pay an annual registra- tion fee of $25. Where the business is very small, the Commissioner may exempt it. These fees are expected to yield approximately $3.8 million.

CURRENCY

Hong Kong's modern currency system came into operation in 1935 when the Currency Ordinance, later renamed the Exchange Fund Ordinance, set up an exchange fund to which note-issuing banks were obliged to surrender all silver previously held by them against their note issues, in exchange for certificates of indebtedness. The certificates, which are non-interest-bearing and are issued and redeemed at the discretion of the Financial Secretary, became the legal backing for the notes issued by the note-issuing banks, apart from their small fiduciary issues. The exchange fund, in practice, has kept its assets in sterling and from 1937 to 1968 operated in a similar manner to traditional Colonial Currency Boards. The ordinance also made the banknotes legal tender.

At the same time the Government undertook to issue one dollar notes to replace the silver dollars in circulation. In 1960, because of the heavy expense of keeping clean notes in circulation, a dollar coin of cupro-nickel and about the same size as a British florin was introduced. Although banks have been asked to withdraw all one dollar notes and also the previously issued five and ten cent notes, as they are received in the course of business, many still remain unredeemed although few appear to be in active circulation. When the Dollar and Subsidiary Currency Notes Ordinance came