ENG-2005 — Page 389

Public Order | 335

interests, safeguard and facilitate legitimate trade and industry, uphold Hong Kong's trading integrity and fulfil relevant international obligations (See also Chapter 5).

Revenue Collection

The department is responsible for the collection of excise duties derived from dutiable commodities stipulated in the Dutiable Commodities Ordinance. These are liquor, tobacco, hydrocarbon oil and methyl alcohol. During the year, the excise duties collected amounted to $6.62 billion, of which 50.8 per cent came from hydrocarbon oil, 36 per cent from tobacco, 13.1 per cent from liquor and 0.1 per cent from methyl alcohol, representing an increase of 1.2 per cent over 2004.

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 2005, the department registered 95 motor traders and assessed the provisional taxable value on 44 956 vehicles.

Revenue Control

Dutiable commodities in Hong Kong are stored in warehouses licensed by the department (bonded warehouses) after import or local manufacture. Removal of dutiable commodities is subject to a permit being issued by the department and the commodities can only be released for local consumption upon payment of duty.

Revenue Protection

A new mode of customs clearance service for passengers, the Red and Green Channel System was implemented on November 1 at all air, land and sea entry points. The introduction of the system enabled the department to enhance revenue protection on dutiable goods.

During the year, the department detected a total of 4 233 cases of abuse of the duty-free concessions, involving a total of 2.22 million cigarettes. The number of cases detected and the cigarettes involved represents an increase of 40 per cent and 0.2 per cent respectively when compared with 2004.

The department maintained its vigorous enforcement action against illicit cigarettes activities. In 2005, 5 895 offenders were arrested and 100.6 million sticks of illicit cigarettes were seized, an increase of 9 per cent and a decrease of 40 per cent respectively over 2004.

At the same time, Hong Kong Customs continued its efforts to stamp out the transnational cigarette smuggling in concert with overseas customs administrations. Timely and proactive exchange of intelligence to monitor suspicious cigarette. shipments resulted in significant seizures of illicit cigarettes in the Asia-Pacific region and in Europe.

Illicit fuel including marked oil (commonly known as 'red oil'), detreated oil and illicit motor spirit was still being used illegally as fuel for vehicles in 2005. To tackle the problem, Hong Kong Customs sustained its blitz operations to eliminate filling stations, marked oil detreating plants and storage for such fuel. Simultaneously, surprise fuel-tank checks were also conducted to detect and deter the use of illicit