ENG-2015 — Page 86

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The Economy

The earnings of husbands and wives are reported and assessed separately. However, where the deductions and allowances of either spouse exceed that spouse's income, or when separate assessments would result in an increase in their total salaries tax payable, the couple may elect to be assessed jointly. Salaries tax contributed some $59.3 billion in 2014-15, accounting for about 12 per cent of total government revenue. Because of generous personal allowances under the Hong Kong tax law, only about 1.7 million people, or 46 per cent of the workforce, were liable to salaries tax for the year of assessment 2013-14.

Owners of land and buildings are charged property tax at the standard rate (15 per cent in 2014-15) on the actual rent received after 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. Properties owned by a corporation carrying on a business locally are exempt from property tax, but the profits it derived from the properties are chargeable to profits tax. Property tax contributed some $2.9 billion in 2014-15, constituting about 0.6 per cent of total government revenue.

Stamp duty is imposed on different classes of documents relating to transfers of immovable property, leases and transfers of shares under the Stamp Duty Ordinance. In 2014-15, the revenue from stamp duties was some $74.8 billion, or about 16 per cent of total government

revenue.

Betting duty is charged on the net stake receipts from betting on horse races and football matches and on the proceeds of Mark Six lotteries, all administrated by the Hong Kong Jockey Club. The yield from betting duty in 2014-15 totalled some $19.5 billion, about 4 per cent of total government revenue.

Under the Dutiable Commodities Ordinance, excise duties are levied on four types of commodities to be consumed locally, namely, hydrocarbon oil, liquor, methyl alcohol and tobacco, irrespective of whether they are manufactured locally or imported. The Customs and Excise Department collects these duties, which totalled $10.1 billion in 2014-15, or about 2 per cent of total government revenue, of which 60.6 per cent was from tobacco, 35.3 per cent was from hydrocarbon oil, 4 per cent was from liquor, and 0.1 per cent was from methyl alcohol and other alcohol products.

In addition, all motor vehicles imported for use on roads are subject to First Registration Tax under the Motor Vehicles (Frist Registration Tax) Ordinance. The Customs and Excise Department assesses the taxable value of vehicles to facilitate the Transport Department's collection of this tax, which totalled $9.55 billion in 2014-15.

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 values (5 per cent in 2015-16). The rateable value of a property is an estimate of its annual open market rent at a designated date. Rateable values are reviewed each year to better reflect prevailing market rents. The current Valuation List, containing about 2.4 million assessments, took effect on 1 April 2015, with rateable values reflecting rental values on 1 October 2014. The revenue from rates in 2014-15 was $22.3 billion, accounting for about 5 per cent of total government revenue.

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