ENG-1988 — Page 94

72

THE ECONOMY

Council area (New Territories). Additional income derives from fees and charges for the services the councils provide. The government has agreed to provide a grant of $273.6 million per annum to the Regional Council for three years from 1988-9 to 1990-1 to enable the Regional Council to assume responsibility for financing and processing all new projects in its capital works programme.

The Housing Authority, operating through the Housing Department, is also financially autonomous. Its income is derived mainly from rents. If the authority's cash flow is inadequate to meet the construction costs of new estates, it may request an injection of capital by the government. The Housing Authority is provided with free land for the construction of rental housing; the value of the land is shown in its balance sheet as a government contribution. Part of the authority's recurrent expenditure, for such activities as clearances and squatter control, is financed from the General Revenue Account. The authority is also responsible for carrying out a programme of squatter area improvements which are funded from the Capital Works Reserve Fund.

Revenue Sources

←

Duties are levied on six groups of commodities - hydrocarbon oils, alcoholic liquor, methyl alcohol, tobacco, non-alcoholic beverages and cosmetics. The Customs and Excise Depart- ment is responsible for collecting and protecting duty revenue. The Dutiable Commodities Ordinance imposes controls on the import, export, manufacture, sale and storage of dutiable items. In 1987-8, $3,389 million was collected in duties, compared with some $3,467 million in 1986-7.

Specific duty rates on alcoholic liquors range from $1.36 a litre on beer to $55 a litre on brandy. In addition, duty is payable at the rate of 30 per cent of the c.i.f. value of spirits and 20 per cent of the c.i.f. value of wines. On tobacco, duties range from $45.50 a kilogram on Chinese prepared tobacco to $175 per 1 000 cigarettes. On motor and aircraft fuels the duty is $2.55 a litre, and on diesel oil for road vehicles it is $1.27 a litre. Duty is levied on methyl alcohol at a rate of $4.55 a litre, and on non-alcoholic beverages at $60 a hectolitre. On cosmetics there is a duty at 25 per cent of the c.i.f. price of imported products and the wholesale price of locally produced products.

Rates are levied on the occupation of landed property at a percentage of the assessed rateable value. This is an estimate of the annual rent at which the property might reasonably be expected to be let. New valuation lists are prepared periodically to bring rateable values into line with market rental levels. The current lists came into effect on April 1, 1988, with all rateable values determined by reference to rents as at October 1, 1986. The rateable values of newly-assessed properties are based on estimates of rental levels at the same reference date.

Charges on rateable values are determined annually by resolution of the Legislative Council. For 1988–9 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. The full revenue from rates in the New Territories is paid to the Regional Council.

Rates are payable quarterly in advance. Exemptions are few, although the government 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 approved guidelines. 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. The total net revenue from rates for 1987-8 amounted to $4,264 million.