ENG-2016 — Page 87

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The Economy

assessments would result in an increase in their total salaries tax payable, the couple may elect to be assessed jointly. Salaries tax contributed some $57.9 billion, or about 13 per cent, of total government revenue in 2015-16. Because of generous personal allowances under the tax law, only about 1.8 million people, or 48 per cent of the workforce, were liable to salaries tax for the 2014-15 year of assessment.

Owners of land and buildings are charged property tax at the standard rate, of 15 per cent in 2015-16, 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 derives from the properties are chargeable to profits tax. Property tax contributed some $3 billion, or about 1 per cent, of total government revenue in 2015-16.

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 2015-16, the revenue from stamp duties was some $62.7 billion, or about 14 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 2015-16 totalled some $20.1 billion, about 5 per cent of total government 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 values (5 per cent in 2016-17). 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 2.5 million assessments, took effect on 1 April 2016, with rateable values reflecting rental values on 1 October 2015. The revenue from rates in 2015-16 was $22.7 billion, or about 5 per cent of total government revenue.

The Rating and Valuation Department is also responsible for the billing and collection of government rent for properties held under land leases granted on or after 27 May 1985, or on the extension of non-renewable land leases. Government rent is levied at 3 per cent of the rateable value of the property and is adjusted in step with any subsequent changes in the rateable value. There were about 1.9 million assessments in the Government Rent Roll on 1 April 2016. Total government rent collected in 2015-16 was $10.2 billion, or 2.3 per cent of total government revenue.

Under the Dutiable Commodities Ordinance, excise duties are levied on four 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 $10.7 billion in 2015-16, or about 2 per cent of total government revenue, of which 61 per cent was from tobacco, 34.9 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.

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