ENG-2011 — Page 107

The Economy 71

Government rent collected in 2010-11 was $6.3 billion, or about 2 per cent of total government revenue.

Fees and charges for services provided by government departments generated about $11.4 billion, or about 3 per cent of total revenue, in 2010-11. It is government policy that fees, in general, should 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 of charge. Government-operated public utilities generated about $3.5 billion, which accounted for about 1 per cent of total revenue; the most important of these, in revenue terms, is provision of water supplies.

The Government also collected $33.9 billion from investments and interest income on the fiscal reserves in 2010-11, amounting to about 9 per cent of the total government revenue.

Lastly, some $65.5 billion, or about 17 per cent of the total government revenue in 2010-11, was generated from land transactions. All revenue from land transactions is credited to the Capital Works Reserve Fund to help finance the Public Works Programme.

Network of Agreements for Avoidance of Double Taxation

Comprehensive agreements for the avoidance of double taxation (CDTAs) with major economies help improve the business environment and facilitate flows of trade, investment and talent between Hong Kong and the rest of the world. They help reduce tax burdens on individuals and enterprises and eliminate uncertainties over tax liabilities. They also enhance Hong Kong's position as an international business and financial centre.

To expand further Hong Kong's network of CDTAs, the HKSAR Government liberalised arrangements for exchanging tax information under the CDTAs to align with international standards. The liberalised arrangements came into force on March 12, 2010, following which Hong Kong signed 17 CDTAs applying the new standards.

Government Procurement

Hong Kong, China is a signatory to the World Trade Organisation Agreement on Government Procurement (WTO GPA). Government procurement is undertaken in accordance with the principles of openness, transparency, fairness, public accountability, value for money and non-discrimination. Open tender procedures are widely used. Restricted or single tender procedures may be used under exceptional circumstances where open competitive tendering would not be appropriate, such as in cases involving compatibility with existing equipment, patent or proprietary items. For complex and critical purchases, pre-qualification exercises may be conducted before tendering to ensure that suppliers are technically competent.

Purchases of goods and related services with values above pre-determined thresholds of the WTO GPA are undertaken by the Government Logistics Department (GLD). These purchases are normally made by competitive tendering to ensure that