ENG-2000 — Page 386

PUBLIC ORDER

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Revenue Collection

The department is responsible for the collection of excise duties derived from the dutiable commodities stipulated in the Dutiable Commodities Ordinance. These are alcoholic beverages, tobacco, hydrocarbon oil and other alcohol products (i.e. methyl alcohol and ethyl alcohol). During the year, the excise duties collected amounted to $7.34 billion, of which 56.9 per cent came from hydrocarbon oil, 33.3 per cent from tobacco, 9.7 per cent from alcoholic beverages and 0.04 per cent from other alcohol products, representing a decrease of 1 per cent over 1999.

The department also assesses the taxable values of motor vehicles under the Motor Vehicles (First Registration Tax) Ordinance for the purpose of levying first registration tax. In 2000, the department registered a total of 135 motor traders and assessed the provisional taxable value of 56 776 vehicles.

Revenue Protection

The department continued its vigorous enforcement action against cigarette smuggling in 2000. Contraband cigarettes are commonly smuggled into Hong Kong from the Mainland by cross-boundary goods vehicles or river trading vessels. During the year, about 134.4 million contraband cigarettes were seized, a decrease of 43.8 per cent compared with 1999.

With stepped-up enforcement action and enhanced intelligence exchange and co- operation with Guangdong Customs, the smuggling of petrol from the Mainland to Hong Kong was brought under control. However, marked oil (commonly known as 'red oil'), detreated marked oil and synthetic petrol continued to be misused as fuel for vehicles. To tackle the problem of illicit fuel, apart from action taken at sea and land boundaries, operations were mounted to wipe out illegal filling stations, illicit oil detreating plants and synthetic petrol manufactories, and to stop the use of illicit fuel in road vehicles.

Legislative amendments to the Dutiable Commodities Ordinance were passed in June to facilitate prosecution of offenders and to introduce a new driving disqualification order for those persons convicted more than once for illicit fuel offences involving the use of vehicles. The maximum fine for illegal dealing in marked oil or detreated marked oil was also increased, from $200,000 to $1 million. As a result of the vigorous enforcement action taken and the enhanced deterrent effect on offenders, the department had reduced the number of illicit filling stations from an estimated 110 in 1999 to around 50 in 2000.

The use of rapeseed oil as fuel for vehicles emerged in September. However, most of the oil sold in illegal retail outlets was vegetable oil mixed with kerosene or diesel, which could cause irreparable mechanical problems in diesel engines. The problem was contained following immediate enforcement action taken by the department.

In 2000, the department neutralised 38 illicit oil detreating plants, eight synthetic petrol manufactories and 578 illicit filling stations. Altogether, 4.53 million litres of various types of illicit fuel were seized in 1 443 cases. The duty potential of the seized illicit fuel amounted to $9.81 million.

Anti-narcotics Operations

The department continued to take vigorous enforcement action to prevent and suppress the unlawful manufacture and distribution of dangerous drugs as well as