ENG-1992 — Page 71

THE ECONOMY

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maintenance. There is a system of provisional payment of tax similar to that for profits tax and salaries tax. Property owned by a corporation carrying on a business in Hong Kong is exempt from property tax (but profits derived from ownership are chargeable to profits tax). Receipts from property tax totalled $1.2 billion in 1991-2.

The Stamp Duty Ordinance imposes fixed and ad valorem duties on different classes of documents relating to assignments of immovable property, leases and share transfers. The revenue from stamp duties accounted for about nine per cent of general revenue, or $9.6 billion, in 1991–2.

Betting duty is imposed on bets at the Royal Hong Kong Jockey Club and on the proceeds of Mark Six lotteries - the only legal forms of betting in Hong Kong. The duty now accounts for about seven per cent of general revenue. The rate of duty is 11.5 or 17.5 per cent of the amount of the bet, depending on the type of bet placed, and 30 per cent on the proceeds of lotteries. Yield in 1991-2 totalled some $7 billion.

per cent

Other taxes collected by the Inland Revenue Department include estate duty, imposed on estates valued at over $4 million at levels ranging from six per cent to a maximum of 18 per cent; hotel accommodation tax of five per cent, imposed on expenditure on accom- modation by guests in hotels and guest-houses; and entertainments tax, imposed on the cost of admission to race meetings at an average rate of about 28 per cent.

The Customs and Excise Department 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 1991-2, $6.8 billion was collected in duties, accounting for about seven per cent of general revenue. Duties are levied on five groups of commodities-hydrocarbon oils, alcoholic liquor, methyl alcohol, tobacco and cosmetics.

Duties are imposed irrespective of whether the product concerned is locally manu- factured or imported. There is no discrimination on the grounds of geographical origin. The levels of duties take into account consumers' ability to pay: champagne is taxed more heavily than beer.

The Rating and Valuation Department is responsible for assessing and collecting rates which are levied on landed property at a fixed percentage of its rateable value. The revenue raised helps finance the various public services provided by the Urban Council and Regional Council, as well as providing a stable and reliable revenue stream to the Government.

Rateable value is an estimate of the annual rent at which a property might be expected to let as at a designated date, and general revaluations are conducted at intervals to keep rateable values up to date. The current lists of rateable values came into force on April 1, 1991 and reflect rental values at July 1, 1990.

The percentage charge is fixed annually by the Legislative Council in accordance with the financial requirements of the Government, the Urban Council and Regional Council. The percentage charge is now fixed at 5.5 per cent. Of this amount, three per cent of the revenue collected from Hong Kong Island and Kowloon is credited to the Urban Council and 3.75 per cent of that collected from the New Territories goes to the Regional Council. The remainder, amounting to $3.5 billion in 1991-2, is credited to general revenue.

Exemptions are few although the government generally provides financial assistance towards payment of rates to non-profit making educational, charitable and welfare organisations, if their premises are being run in accordance with approved guidelines. No