ENG-1970 — Page 56

FINANCIAL STRUCTURE

31

On liquors, the rates range from $1.60 per gallon on Hong Kong brewed beer to $73 a gallon on non-Commonwealth liquors and spirits. On tobacco, they range from $2.50 a pound on Chinese prepared tobacco to $11.25 a pound on non-Commonwealth cigars; and on hydrocarbon oils, from two cents a pound on liquefied petroleum gas to $1.80 a gallon on motor spirits. The rates for table-waters and methyl alcohol are 48 cents and $7.50 a gallon respectively.

All firms engaged in the import, export, manufacture or sale of dutiable commodities must be licensed.

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 Com- missioner of Rating and Valuation and is frequently revised to bring it up to date. The estimated revenue from rates for 1970-1 is $327 million.

There are few exemptions. Premises used for educational, chari- table 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to direct taxation in Hong Kong in 1940 as a temporary war time measure and, although the War Revenue Ordinance was not repealed until 1947, no attempt was made to collect tax in the two years following the liberation of Hong Kong. However, a new source of revenue was by then essential and it was decided to impose as a permanent measure with effect from April 1, 1947 a direct tax on earnings and profits. Under the Inland Rev- enue Ordinance, tax is charged only on income or profits arising