ENG-1987 — Page 86

64

THE ECONOMY

These are hydrocarbon oil, alcoholic liquor, methyl alchohol, tobacco, non-alcoholic beverages, and cosmetics. All firms engaged in the import, export, manufacture or storage of these commodities must be licensed and, additionally, a sale licence is also required in certain cases.

Duty is payable on European-type liquor, except beer, cider and perry, at the rate of 20 per cent of the c.i.f. value of the liquor and, in addition, at the relevant specific duty rates. The specific duty rates on alcoholic liquors range from $1.28 a litre on beer to $67 a litre on brandy. On tobacco, the rates range from $43 a kilogram on Chinese prepared tobacco to $220 a kilogram on cigarettes. On motor and aircraft spirits the duty is $2.40 a litre, and on diesel oil for road vehicles it is $1.20 a litre. On methyl alcohol the duty is $4.30 a litre. On non-alcoholic beverages the duty is $60 a hectolitre. There is a 25 per cent ad valorem duty on the c.i.f. price for imported, or on the wholesale price for locally produced, cosmetics.

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. The current lists came into effect on April 1, 1984, with all rateable values determined by reference to rents as at July 1, 1983. For newly assessed premises, the rateable values are also based on rental levels as at this reference date.

The percentage charges on rateable values are determined annually by resolution of the Legislative Council. For 1987–8 the charge is six per cent. In the Urban Council area (Hong Kong, Kowloon and New Kowloon) part of the rates charged is paid to the Urban Council, the remainder being credited to the General Revenue Account, whereas in the Regional Council area (New Territories) all the rates are paid to the Regional Council.

The relief scheme introduced on April 1, 1984 to cushion the impact of the increase in rates on ratepayers following the last revaluation was removed with effect from April 1, 1987. Rates are payable quarterly in advance and exemptions are few. However, the govern- ment generally provides financial assistance towards the payment of rates to non-profit- making 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.

During the year, a general review of all rateable values proceeded as planned. The new rateable values will take effect on April 1, 1988.

The taxes and duties making up the internal revenue, with the exception of the air passenger departure tax and the Cross Harbour Tunnel passage tax, are collected by the Inland Revenue Department. These consist of betting duty, entertainments tax, estate duty, hotel accommodation tax, stamp duty, and earnings and profits tax.

Betting duty is imposed on bets on authorised totalisators and on the proceeds of Mark Six lotteries. The rate of duty is either 9.5 per cent or 16 per cent of the amount of the bet, depending on the type of bet placed, and is 30 per cent on the proceeds of lotteries.

Entertainments tax is imposed on the prices of admission to cinemas and to race meetings at rates which vary with the admission prices. These average about nine per cent in the case of cinemas and 29 per cent in the case of race meetings.

Estate duty is imposed on that part of a deceased's estate situated in Hong Kong. The rates of duty charged range from a minimum of six per cent on estates valued between $2 million and $2.5 million to a maximum of 18 per cent on estates valued in excess of $5 million. Estates valued at less than $2 million are exempt from duty.