ENG-1983 — Page 76

THE ECONOMY

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public housing estates. Transfers are made from the General Revenue Account to the fund to meet the loan requirements of the Housing Authority. Otherwise the fund's income is derived from interest payments and capital repayments.

The Lotteries Fund is used to finance the development of social welfare services through loans and grants. It derives its income mainly from a share of the proceeds of the Mark Six Lotteries.

The Student Loan Fund is used to finance loans to students of the two universities, the polytechnic and other approved post-secondary institutions, and to Hong Kong students studying in the United Kingdom. Transfers are made as necessary from the General Revenue Account to the fund to enable the fund to meet its commitments, the only other source of funds being loan repayments.

The Capital Works Reserve Fund finances the Public Works Programme and land acquisitions. Its income is entirely derived from transfers from the General Revenue Account, and the amount of such transfer each year is determined in the light of available resources, particularly from the proceeds of land sales.

Revenue Sources

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There is no general tariff on goods entering Hong Kong but duties are charged on four groups of commodities

alcoholic liquors, tobacco, certain hydrocarbon oils and methyl alcohol - irrespective of whether they are imported or manufactured locally. All firms engaged in the import, export, manufacture, storage or sale of dutiable commodities must be licensed.

In February 1983 the basic duty rates for all four groups of dutiable commodities were increased. The duty rates on alcohol now range from $0.66 a litre on Hong Kong brewed beer to $67 a litre on brandy. On tobacco, rates range from $33 a kilogram on Chinese prepared tobacco to $178 a kilogram on cigarettes, whilst rates on hydrocarbon oils are $2 a litre on motor and aircraft spirits and $1 a litre on diesel fuel for motor vehicles. The rate for methyl alcohol is $3.24 a litre. A statement of revenue from duties is given at Appendix 10.

Rates are levied on the occupation of landed property at a percentage of the assessed rateable value which is, briefly, the annual rent at which the property might reasonably be expected to be let. New valuation lists are prepared periodically as directed by the Governor, enabling rateable values to be reviewed and updated in line with market rental levels. During 1983 a review of all rateable values was carried out and it is planned to bring the new valuation lists into effect on April 1, 1984.

The percentage rate charges are determined annually by resolution of the Legislative Council. For 1983-4, general rates are charged at 5.5 per cent of the rateable values of tenements and Urban Council rates at eight per cent of rateable values in the urban areas. The total rates currently charged in the urban areas are therefore 13.5 per cent of rateable values. General rates of 13.5 per cent are charged in the New Territories. No Urban Council rates are levied in the New Territories because the council has no jurisdiction there.

Rates are payable quarterly in advance and exemptions are few. However, the govern- ment generally provides financial assistance towards the payment of rates to educational, charitable and welfare organisations if the premises they occupy are being run in accordance with an approved target or policy. No refund of rates is allowed for vacant domestic premises but half of the rates paid may be refunded in the case of vacant non-domestic premises.