ENG-1996 — Page 105

THE ECONOMY

government, the Urban Council and the Regional Council, as well as 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 government prepared new lists of rateable values to take effect on April 1, 1997. These rateable values reflect rental values at July 1, 1996.

The rates percentage charge is fixed by the Legislative Council in accordance with the financial requirements of the government, the Urban Council and the Regional Council. For 1995-96, it was fixed at 5.5 per cent.

In 1995-96, the number of assessments in the Valuation Lists at the year's end stood at about 1 474 000, and the total revenue from rates was $14.6 billion. Of this amount, $5.2 billion, collected from Hong Kong Island and Kowloon, was credited to the Urban Council and $3.46 billion, collected from the New Territories, went to the Regional Council. The remainder, amounting to $5.8 billion, was credited to the government's General Revenue Account, accounting for about 3 per cent of the total

revenue.

The government derives significant amounts of revenue from other sources. Fees and charges for services provided by government departments generated a total of about $9.9 billion, or about 6 per cent of total revenue, in 1995–96. It is government policy that fees should in general be set at levels sufficient to recover the full cost of providing the goods and services. Certain essential services are, however, subsidised by the government or provided free.

Also, in 1995-96, the government collected $8.7 billion, amounting to about 5 per cent of the total revenue, from investments and rents from government properties. A further $7.2 billion was generated by government-operated public utilities, accounting for about 4 per cent of the total revenue. The most important of these, in revenue terms, are waterworks and the airport.

In addition, some $19.4 billion, or about 11 per cent of the total revenue in 1995- 96, was generated by land sales. Since implementation of Annex III to 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 $418 million in 1995-96), has been credited to the General Revenue Account. All revenue from other land transactions is credited to the Suspense Account of the Capital Works Reserve Fund, pending sharing with the future Hong Kong Special Administrative Region Government as provided for under Annex III. The sharing arrangements in 1995-96 resulted in the transfer of $19 billion to the Works Account of the Capital Works Reserve Fund and $17 billion to the future Hong Kong Special Administrative Region Government's Land Fund.

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