ENG-1993 — Page 86

THE ECONOMY

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Other taxes collected by the Inland Revenue Department include estate duty, imposed on estates valued at over $5 million at levels ranging from six per cent to a maximum of 18 per cent, and hotel accommodation tax of five per cent, imposed on expenditure on accommodation by guests in hotels and guest-houses.

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 1992–93, $7.2 billion was collected in duties, accounting for about six per cent of total revenue. Duties are levied on four groups of commodities - hydrocarbon oils, alcoholic liquor, methyl alcohol and tobacco.

Duties are imposed irrespective of whether the product concerned is locally manu- factured or imported. There is no discrimination on the grounds of geographic origin.

A comprehensive review of the Dutiable Commodities Ordinance is presently being undertaken to update terminology and streamline administrative procedures.

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, besides providing a stable and reliable revenue stream for the government.

The rateable value is an estimate of the annual rent at which a property might be - expected to be let, as at a designated date, and general revaluations are conducted at intervals to keep rateable values up-to-date. During the year, the department prepared new lists of rateable values to take effect on April 1, 1994. These rateable values reflect rental values at July 1, 1993.

The percentage charge is fixed annually by the Legislative Council in accordance with the financial requirements of the government, the Urban Council and the Regional Council. The percentage charge for the year 1993-94 was fixed at 5.5 per cent. Of this amount, three per cent of the revenue collected from Hong Kong Island and Kowloon was credited to the Urban Council and 3.75 per cent collected from the New Territories went to the Regional Council. The remainder, amounting to $4.4 billion, was credited to the government's General Revenue Account.

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 $8 billion in 1992–93. The government's general policy is that the cost of the service provided should be fully covered by the level of relevant fees or charges. Certain essential services are, however, subsidised by the government or provided free.

A further $7.2 billion was generated by government-operated public utilities. The most important of these, in revenue terms, are water supplies, postal services and the 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 $4.9 billion, was collected by the Commissioner for Transport.

In addition, some $8.9 billion, or about seven per cent of the total revenue of the year, was generated by land transactions. Following the implementation of Annex III of the Joint Declaration, revenue from land transactions decided upon before the coming into force of the Joint Declaration, and from those conferring a benefit that expires on or before June 30, 1997 (amounting to some $300 million in 1992–93), was credited to the general