ENG-2010 — Page 383

Public Order 321

Customs and Excise

The Customs and Excise Department is responsible primarily for the collection of revenue on dutiable goods, prevention of duty evasion, suppression of drug trafficking and abuse, prevention and detection of smuggling of contraband, and protection of intellectual property rights. The department also enforces legislation to protect consumer interests, safeguard and facilitate legitimate trade and industry, uphold Hong Kong's trading integrity and fulfil relevant international obligations. At year-end, it had an establishment of about 5 559 staff. (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: liquor, tobacco, hydrocarbon oil and methyl alcohol. During the financial year 2009-10, the excise duties collected amounted to $6.46 billion, of which 51.9 per cent was from tobacco, 43.9 per cent from hydrocarbon oil, 4 per cent from liquor and 0.2 per cent from methyl alcohol, representing a total increase of 6.8 per cent over 2008-09.

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 2010, the department registered 151 motor traders, assessed the provisional taxable value on 58 514 vehicles and re-assessed 13 738 of them, resulting in the collection of $6.49 billion first registration tax by the Transport Department.

Revenue Control

The department administers a licensing and permit system to control the manufacture, import, export, storage and movement of dutiable commodities. It ensures that no dutiable commodities, whether imported or locally manufactured, are released for local consumption unless full duty has been paid.

Revenue Protection

The department has stepped up enforcement actions to suppress illicit cigarette activities following the increase of tobacco duty since February 2009 and the new limits on tobacco products brought into Hong Kong since August 2010. During the year, there were 2 162 cases involving smuggling, storage, distribution and peddling of illicit cigarettes, a decrease of 26 per cent compared with 2009. A total of 75 million sticks of illicit cigarettes were seized.

During the year, 4 147 people were fined under the Compounding Scheme for abuse of duty-free cigarette concessions, a decrease of 25 per cent compared with 2009, involving 1.5 million sticks of cigarettes.

The department continued co-operating with overseas customs administrations to stamp out transnational cigarette smuggling. In 2010, by monitoring suspicious shipments and through intelligence exchange, the department's efforts led to the seizure of 19.09 million sticks of illicit cigarettes by overseas enforcement authorities.