ENG-1973 — Page 68

FINANCIAL STRUCTURE

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On liquors, the basic 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 $1.30 a gallon on diesel oil for road vehicles to $1.80 a gallon on motor spirits.

All firms engaged in the import, export, manufacture or sale of dutiable commodi- ties 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, prepared by the Commissioner of Rating and Valuation, covers the rating areas of Hong Kong Island, Kowloon, New Kowloon and parts of the New Territories. It is frequently revised to bring it up-to-date and such a revision came into force on April 1, 1973. As a result of this revaluation the overall average increase in rateable values was about 43 per cent. Also effective from April 1, 1973 was a new Rating Ordinance which updated rating practices and procedures and gave effect to changes proposed during the preceding year.

The principal changes introduced by the new ordinance included provision for the payment of both general rates and Urban Council rates on the rateable value of tenements in the urban areas. Compared with the single rate of 17 per cent previously applicable to such tenements, the new ordinance provided for the general rates and the Urban Council rates together not to exceed 15 per cent. The subsequent apportion- ment between the two by resolution of the Legislative Council was eight per cent for the general rates and six per cent for the Urban Council rates. Other changes were the introduction of what is known as 'tone of the list' in respect of the assessment of new premises-new assessments must be in line with those for comparable premises already included in the list.

There are few exemptions from rates. Premises used for educational, charitable 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.

The estimated revenue from rates for 1973-4 is $559,390,000.

Internal Revenue

Earnings and Profits Tax is covered by the Inland Revenue Ordinance on various forms of income arising in or derived from Hong Kong. The current standard rate of tax of 15 per cent has been in force since April 1, 1966. The various forms of income which are subject to separate taxes are-property, profits, interest and salaries.

Property Tax is charged at the standard rate on the owner, but collected from the ratepayer, normally the occupier. There are various exemptions including property occupied by the owner for residential purposes, and property in the New Territories.