INCOME TAX FOR H.K.
pire
(Continued from Page 1) ·
I hope and believe that there will be universal acceptance hora of the fundamental principle that our responsibilities in Hong Kong towards Great Britain are in no way less than those of British sulf- jacts realdent in the United King- dom and that just as they are prepared to bear whatever burden the successful conduct of the war may impose upon them, so we also must leave nothing undone that
do towards that In other words, this la every whit as much.our, war as it is Britain's.
we can
them would be forthcoming. In parti- cular the destre was expressed that existing social services and approved plans for their extension should con- tinue as far as was possible; further- more any marked retrenchment in the Civil Service was deprecated unless and until we were advised by him to act.
It will be agreed, I think, that this confident policy, which un- His questionably reflects that of Majesty's Government, is very en- heartening at such a time as the present.
of
THE CHINA MAIL, OCTOBER 12, 1939
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The estimated financial outcome of what I have called the ordinary bud- get is a small surplus. That expecta- tion is due partly to the additional revenue from the sources just men- tioned and partly to the transfer of certain appropriate expenses to the defence budget. If, however, during the fifteen month period which the estimates cover it appears that a de- ficit is probable it should not be diffi- cult to curtail expenditure, and es- pecially capital expenditure, suffi- ciently to avoid that result.
increase in duties on petrol and alco- holic liquors which have a dual pur- The Secretary of State's two pro- pose, viz., to raise more revenue and visos, which I mentioned just now as to effectuate the policy of conserving In sterling exchange: the other imple- being conditions to be observed framing the estimates, dealt with thement certain recommendations of the grebt Taxation Committee and I will leave following points. Firstly, the end.
friend to state importance of conserving the exchange it to my Honourable
their nature. resources of Great Britain through It is in accordance with that prin- control over the purchase and export those ciple that the financial proposals that of foreign currencies and of
British currencies which are not on a will be placed before you at this ses- slon have been framed and I take this sterling footing. Hong Kong's proce- found, early opportunity of saying that they dure in this respect, it was are not to be looked upon as the maxi- could not be quite "on all fours" with may be made on that of other British Colonies because mum demand that the local taxpayer before victory of the predominating importance crowns our arms: They are, however, our entrepot trade, and special treat- was therefore all that we can wisely do at the moment of the problem ment.
permitted to us. I have asked Honourable the Financial Secretary to give the Council a connected account of the measures taken by Government
I come now to the defence budget, with this end in view, and I myself by means of which Hong Kong will shall have a further word to say on make its contribution towards the this subject when speaking of the re-prosecution of the war against Ger- venue estimates. The second point on which the Secretary of State express- ed a proviso was the avoidance of ex- penditure which, by creating a demand for unessential goods would deflect men, materials and shipping from war purposes. In this connexion I may say that I had already given orders that sucessor's new house should be stopped before this wise ad- vice was received!
With this object in view it is Government's intention to replace the budget which is formally be- fore you to-day by two separate budgets: the former will provide for the normal expenditure Government departments, the lat ter is designed to fulfil our obliga- tione as a member of the Eritish Empire while engaged in a major
war.
of
what I
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That contribution may take one of two forms, the first being the meeting from our own pockets of such addi- tional local expenditure as the situa- tion may demand for volunteer naval,
military and air defences and other war services; the other, free gifts in cash or in kind to His Majesty's Gov- ernment towards its aim viz. the de-
It may surprise you that will describe as the ordinary budget does not shew greater reductions in expenditure. The estimates, of course, were fairly well advanced when war broke out and early in September we were in the act of considering the ex-
So much for the expenditure estim- tent to which they should be cut down
which when I received from the Secretary ates in the ordinary budget, of State some very valuable guid-will be more fully explained by the Mr. MacDonald's Honourable the Financial Secretary in in the counsel was that, subject to two pro- his speech this afternoon and
On visos of which I will make mention memorandum prepared by him. later, there should be as little distur- the Revenue side there are consider-to bance as possible with the Colony's able alterations to be made, but these curent activities and developmental do not appear in the printed volume, schemes, so long as revenue to finance The most important of thom
ance.
effect In
GLYN HAT
STYLES FOR
AUTUMN
SO
IMPORTANT AN ARTICLE OF DRESS IS THE SELECTION OF
SUITABLE HEADWEAR
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THAT NO MATTER HOW PLEASING YOUR NEW SUIT MAY BE. HOWEVER WELL SELECTED ALL OTHER ACCESSORIES- THE CROWNING' REQUIREMENT REMAINS—A HAT OF QUALITY IN PERFECT GOOD TASTE – MAY WE THERE- FORE SUGGEST A GLYN THIS AUTUMN-OUR SELECTION OF STYLES NO LESS THAN OF NEW TONES WAS NEVER SO COMPLETE AND YOU WILL FIND HERE YOUR CHOICE MADE EASY-PRICES TOO ARE EQUALLY ATTRAC-
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FROM 1475 TO 2150 Lass 10%
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feat of the enemy, The former of these has its natural limitations and not wide ones at that: but I trust that not only every member of this House but also every citizen of this Colony will agree that there should be no limit upon the aid that we should give His Majesty's Government other than our ultimate ability to pay.
Quite obviously in, this lightly taxed community that limit iles at a great distance and could not be reached through existing revenue channels. It is therefore necessary to create new moana and Govern- ment has decided that an Income Tax is by far the most suitable. Stops will therefore be taken at once to draft the necessary logis- lation and to bring into being the necessary machinery.
APPLIS
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The standard rate of income tax ten per cent. will be charged on all company profits, payments of interest etc. and on all income in respect of which the recipient has made no claim to personal
but the family allowances, who makes such a claim will pay at 10 per cent, only on the balance of his income after deducting his allowances and after paying at half rate, 5 per cent. on the first part of his taxable income,
of
The allowances Government has provisionally in mind are earned Income allowance, one-tenth Income up to $15,000, personal allowance, $1,800 for a single man, plus $1,350 for a wife, $1,000 for the first child, and $600 for each subsequent child. The five per cent. rate will be charged on the first $3,000 after deducting al- lowances.
twofold duty, which rests upon this Legislature at this juncture.
On the one hand we are respon- sible for the proper care, a phrase which includes improvement, of this small but important part of His Ma- jesty's Empire and it is especially in-. cumbent upon us to maintain and, as far as we can extend, the Colony's social services; particularly public health and education:, you will find
·ordinary increased provision, in the budget under both those heads.
On the other hand it is our duty as well as in our interest to give all that we can to help His Majesty's My hope is that within six months Government in the great struggle in that machinery will be at work.which the Empire is
engaged. The And Plans are not far enough advanced as task of this Government is to yet for any detailed description, but In order to prevent unnecessary alarm I will say that it is not intended at the initial stage to precribe very high
rates of tax.
to
Attention has also
been given
the question of taxing Ex- cess Profits.. There may plain- ly "be" justification for such a measure in "due course, but I feel- and I know that my Honourable friend agrees with me-that we had better tackle the Income Tax pro- blem first and, when that has been done, take up again the matter of Excess Profits Duty.
the right balance between these two duties and I confidently hope that you will and yourselves able to endorse the proposals that are now about to come before you.
I do not wish to be thought to make light of the burden which. they will lay upon the shoulders. of the taxpayers of Hong Kong. The Income Tax, even at the re- latively low basic rate of two shill. Ings in the pound, must inevitably give a shook to the social and commercial structures of the Co. lony, and considerable adjustment will be necessary in order to ab. ! sorb that shock.
This address is, of course, intend- ed to do no more than outline the prin- Nevertheless I am fully confident ciples in accordance with which this that they will no more shirk their Coloriy's financial policy for the near duty where their money is concerned future is being framed and the Hon- than they have in offering their ser-. ourable the Financial Secretary will, ivices, and if necessary their lives, In this afternoon, explain the Govern-Britain's cause.
ment's proposals in ampler measure. I now commend the business of the I have tried to put before you the meeting to your consideration.
•
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