ENG-2001 — Page 110

THE ECONOMY

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allowances under Hong Kong tax law, about 63 per cent of the SAR's workforce has no salaries tax liability at all.

Owners of land or buildings in Hong Kong are charged property tax at the standard rate of 15 per cent of the actual rent received, less an allowance of 20 per cent for repairs and maintenance. There is a system of provisional payment of tax similar to that for profits tax and salaries tax. Property owned by a corporation carrying on a business in Hong Kong is exempt from property tax (but profits derived from ownership are chargeable to profits tax). Receipts from property tax accounted for about 5 per cent of total revenue, or about $11 billion in 2000-01.

The Stamp Duty Ordinance imposes fixed and ad valorem duties on different classes of documents relating to assignments of immovable property, leases and share transfers. The revenue from stamp duties accounted for about 5 per cent of total revenue, or about $10.9 billion, in 2000–01.

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A duty is imposed on bets on horse racing administered by the Hong Kong Jockey Club and on the proceeds of Mark Six lotteries the only legal forms of betting in Hong Kong. The rate of duty is 12 per cent or 19 per cent on betting proceeds (depending on the type of bet placed) and 25 per cent on the proceeds of lotteries. The yield in 2000-01 totalled some $12.6 billion, and accounted for about 6 per cent of total revenue.

Estate duty is imposed on estates valued at over $7.5 million, at levels ranging from 5 per cent to a maximum of 15 per cent, while a hotel accommodation tax of 3 per cent is imposed on expenditure on accommodation by guests in hotels and guesthouses.

Under the Dutiable Commodities Ordinance, duties are levied on only four types of commodities - hydrocarbon oil, alcoholic beverages, other alcohol products (i.e. methyl and ethyl alcohol) and tobacco products, both locally manufactured and imported. The Customs and Excise Department is responsible for collecting these duties. In 2000-01, the department collected duties worth $7.3 billion or about 3 per cent of total revenue.

The Rating and Valuation Department is responsible for the billing and collection of rates, which are levied on landed properties at a specified percentage of their rateable value. In 2001-02, the rates percentage charge is 5 per cent. The revenue raised provides a stable and reliable revenue stream for the Government.

The rateable value of a property is an estimate of its annual rent in the open market as at a designated date. In order to better reflect prevailing market rents, revaluation of rateable values is now conducted on an annual basis. The current Valuation List took effect on April 1, 2001 with rateable values reflecting rental values at October 1, 2000. The Valuation List as at March 31, 2001 contained about 1890 000 assessments. In 2000-01, the revenue from rates was $14.4 billion, accounting for about 6 per cent of total revenue.

The Rating and Valuation Department is also responsible for the billing and collection of Government rent which is payable from July 1, 1997 for 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. Government rent is levied at 3 per cent of the rateable value of the lot and is adjusted in step with any subsequent changes in the rateable value. There were about 1 340 000 assessments in the