ENG-1998 — Page 99

THE ECONOMY

The number of assessments in the Valuation Lists as at March 31, 1998, stood at about 1 621 000. In 1997-98, the total revenue from rates was $16.3 billion. Of this amount, $5.9 billion, collected from Hong Kong Island and Kowloon, was credited to the Provisional Urban Council and $4.2 billion, collected from the New Territories, went to the Provisional Regional Council. The remaining $6.2 billion, was credited to the government's General Revenue Account.

The Rating and Valuation Department is also responsible for the billing and collection of government rent. Government rent is payable from July 1, 1997, for all land leases granted on or after May 27, 1985, and on the extension of non-renewable land leases. The latter comprise all land leases in the New Territories and New Kowloon north of Boundary Street which were renewed on June 28, 1997. The rent is equivalent to 3 per cent of the rateable value of the lot and is adjusted in step with changes in the rateable value. There were about 991 000 assessments in the Government Rent Roll as at March 31, 1998. The total rent collected in 1997-98 was $3.1 billion.

The government derives significant amounts of revenue from other sources. Fees and charges for services provided by government departments generated about $11.3 billion, or about 4 per cent of total revenue, in 1997–98. It is government policy that fees should in general be set at levels sufficient to recover the full cost of providing the services. Certain essential services are, however, subsidised by the government or provided free. Government has frozen most fees and charges in 1998-99.

Also, in 1997-98, the government collected $14.2 billion, amounting to about 5 per cent of the total revenue, from investments and rents from government properties (excluding the revenue collected from government rent which is charged at 3 per cent of rateable value). A further $6.7 billion was generated by government-operated public utilities, accounting for about 3 per cent of the total revenue. The most important of these, in revenue terms, are waterworks and the airport.

Lastly, some $64 billion, or about 23 per cent of the total revenue in 1997-98, was generated from land transactions. In accordance with Annex III to the Sino-British Joint Declaration, revenue from land transactions decided upon before the coming into force of the Joint Declaration, and from those conferring a benefit that expired on or before June 30, 1997, was credited to the General Revenue Account. This amounted to $72 million up to June 30, 1997 in 1997–98. All revenue from other land transactions was credited to the Suspense Account of the Capital Works Reserve Fund for sharing with the HKSAR Government Land Fund. The sharing arrangements in the first quarter of 1997-98, i.e. up to June 30, 1997, resulted in the transfer of $44 billion to the Works Account of the Capital Works Reserve Fund and a total of $41 billion to the HKSAR Government's Land Fund. Since July 1, 1997, the government receives revenue from land transactions in full. For the period. between July 1, 1997 and March 31, 1998, the government received $20 billion from land transactions. All revenue from land transactions is now credited to the Capital Works Reserve Fund.

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