ENG-1974 — Page 58

FINANCIAL STRUCTURE

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A further feature of the Inland Revenue Ordinance is the right of a taxpayer to elect for what is known as Personal Assessment. This aggregates his income from the four sources mentioned earlier and gives him the benefit of the same personal allow- ances and sliding scale of tax as would be allowed for Salaries Tax purposes. A set-off of tax paid on the individual sources of income is allowed.

There is no tax on dividends received, as they are regarded as having been paid out of taxed profits.

It is estimated that the revenue from these taxes on earnings and profits during the financial year 1974-5 will be $1,715 million.

Estate Duty is imposed on that part of a deceased person's estate which is situated in Hong Kong. The estate value exemption limit has been raised from $200,000 to $300,000 for estates of persons dying on or after April 1, 1974. The rate of duty now varies from six per cent on estates valued between $300,000 and $400,000 to 15 per cent on those in excess of $1 million. The yield for the year ended March 31, 1975 is estimated at $34 million.

Stamp Duty imposes fixed duties on certain classes of documents and ad valorem duties on others. The estimated yield from Stamp Duty for the year ended March 31, 1975 is $465 million.

Entertainments Tax is now imposed only on the price of admission to race meetings at rates which vary with the amount charged and which averages approxi- mately 22 per cent. The estimated yield from this source for 1974–5 is $3.8 million.

Betting Duty is imposed on bets made on an authorised totalisator or pari- mutuels and on contributions or subscriptions towards authorised cash-sweeps. The duty is 7 per cent on bets and 25 per cent on cash-sweep contributions and is assessed from the returns of the Royal Hong Kong Jockey Club which holds the monopoly for conducting such operations, including a limited form of off-course betting. The estimated yield for the year ending March 31, 1975 is $70 million.

Hotel Accommodation Tax is imposed on hotel and guest house accommodation and is levied at the rate of two per cent on the accommodation charges. For the financial year 1974-5 this levy is estimated to yield $6.3 million.

Business Registration is compulsory for every business operating in Hong Kong, except those carried on by charitable institutions. With effect from April 1, 1974 the annual registration fee is $50 instead of the previous $25, but exemption from payment of the fee is granted where the business is small. The total income from these fees, service fees for copy documents and other fees for the fiscal year 1974-5 is expected to be $10.4 million.

Currency

Hong Kong has no central bank, and currency notes are issued largely by three commercial banks-the Hongkong and Shanghai Banking Corporation, the Chartered Bank and the Mercantile Bank. Notes of one cent denomination are issued by the government, as are coins of one dollar, 50 cents, 10 cents and five cents. The total