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The following is the transcript of the English portion of the Financial Secretary, Mr Donald Tsang's, media session at CGO after attending the Executive Council Meeting today (Tuesday):

Mr Tsang: You all know that I have consulted, widely, the Legislative Council on the preparations of next year's Budget, particularly the revenue part of the Budget. There has been one common issue and that is the question of payment of rates. And there is one common concern, too, over the question of rates, it is that we have been using July 1, 1996, as a reference date for determining rates and rateable values. Many members have felt that that reference date is out of date.

Since 1996 there had been a gross depreciation of our property and rental value. For this reason they believe that many Hong Kong people, in particular ratepayers, have been paying higher than what they should have been paying in terms of rates, and there was a question whether I should conduct a revaluation as soon as possible.

According to our existing cycle, our next revaluation should take place in 1999, so that the new rateable value should come into effect on April 1, 2000. But in view of the comments made by members, and having considered carefully our own position, I have decided to advance the revaluation by one year. In other words, I will be asking the Commissioner for Rating and Valuation to conduct a revaluation this year, using October 1 as the reference date, so that a new rateable value will come into effect on April 1, 1999.

And from this point onwards, I wish to introduce the method of annual revaluation. In other words, next year we will do a revaluation using October 1, 1999 as the reference date, then the new revaluation will then come into effect on

April 1, 2000. This method will be more reasonable to the ratepayer, more reasonable to the government, and will also shorten the period between the reference date and the effective date, and the whole system will be a lot more reasonable and more equitable from every point of view.

I wish to add one more point. I have decided, in terms of revaluation; I have not decided upon the percentage of rates to be charged. That is a matter to be decided in the context of my next Budget. But whatever my decision would be, what I have decided now, today, on the revaluation, particularly the advance of my revaluation, will be helpful to all concerned. Well, that is all I want to say.

Question: Mr Tsang, how much revenue will the government lose from this and do you expect that rates will actually be cut or frozen?

Mr Tsang: I do not know exactly how much revenue will be foregone as a result of this revaluation. That will be the reason why the Commissioner for Rating and Valuation will be conducting a survey and will be sending out a questionnaire very quickly, using October 1, this year, as a reference date. But I am quite sure there has been some downward movement of rateable value and rental value since 1996, which is the current reference date, so quite clearly, there will be some loss of revenue. Exactly how much, I do not know.

On the question of rateable value, the percentage of rates to be charged, that is a matter which I have to decide later on. That is in the context of the Budget.

End/Tuesday, November 10, 1998

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Financial Secretary's transcript (Chinese part)