ENG-1992 — Page 72

THE ECONOMY

refunds of rates are allowed for vacant domestic properties, but half the rates paid may refunded in the case of unoccupied non-domestic premises.

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The government derives significant amounts of revenue from a number of other sources. Fees and charges for services provided by government departments generated a total of about $7.2 billion in 1991-2. The government's general policy is that the cost of the service provided should be fully covered by the level of relevant fees or charge. Certain essential services are, however, subsidised by the government or provided free.

A further $6.7 billion was generated by government-operated public utilities. The most important of these, in revenue terms, are water supplies, postal services and Kai Tak Airport. Significant sums also accrued to general revenue from the tax imposed for the registration of motor vehicles under the Motor Vehicles (First Registration Tax) Ordinance. This revenue, amounting to approximately $3.4 billion in 1991-2, is collected by the Commissioner for Transport.

Finally, about $0.9 billion was received in the same year by way of royalties and concessions. These are paid by certain major companies holding franchises, such as the Cross Harbour Tunnel Company and television broadcasters, as well as holders of concessions to operate taxis and petrol stations.

The cumulative effect of all these (as well as a number of minor) revenue sources is to provide the government with a stable and fairly broad-based tax system, which is able to ensure that adequate funds are available for the implementation of its medium-term expenditure programmes, as well as the maintenance of adequate fiscal reserves.

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