WAR TAXATION CONTROVERSY REVIVAL
fict.
paper,'
means
uf
of
“Excessive Zeal"
to-
(Continued from Page 2) tain facts and circumstances in re-¡ takes up is fundamentally opposite
no hesitation in making to Gov- gard to the introduction of te to that teken up by Government venue for 1938 exceeded the es- War Revenue Ordinance?
ernment any representations which hitberto. As I pointed out in this As to how far evasion of death we might consider it our duty so timated revenue by nearly 61 On the 4th December, 1939, Mr. Council on the 14th March, 1940, duties exists I do not feel com- to do. million that the actual revenue Caine addressed a letter to each His Excellency Sir Geoffry North- petent to speak. But of this I am for 1939 exceeded the estimated member
I know that the Immigration of the Committee, incote, in his speech In this Council quite certain. If evasion could be Officer has not spared himself in revenue by over 5 million: and which he stated:-
on November 16th, 1939, made it prevented by zeal and vigilance, the discharge of his very difficult that the revised estimate of re- "I enclose some suggestions for a quite clear that Government did it would have been effectively duties. But I do say that what- venue for 15 months in respect of draft report of the Income Tax Com- not determine to raise a war bud- stopped by now, because I 1940/41
can ever may be the explanation, the exceeded the
I am not circulating them as original mittee. estimate by over 16 million. I can an official Committee document be-
get revenue in any pre-determined imagine no one possessing greater Chinese community cannot be ex- cause they repreacht what I hope the sum: In other words, the Govern-zeal, and exercising greater vigi pected to acquiesce in the con- only hope that the current estim-Committee will be prepared to agreement's attitude was that as re-tance, than the present holder of tinued administration of a mea- ated revenue may happily prove to rather than what has so far been gards war expenditure, that ex- the office of Superintendent of In- sure which to err in the same direction for agreed.
compels people to In view, however, of my appenditure was to be limited to the land Revenue and Estate Duty wait for long hours outside the the current year, so that funds proaching departure I thought night sum obtainable by the War Re-Commissioner, for whom, if he Immigration Office, harded may be available for so many im- be helpful to put my own Ideas on
venue Ordinance, and not that the will allow me to say so, I hold a gether like cattle, in order to get portant projects and social ser-
Colony had to find a specified high regard. Indeed. I go further a permit or to get back a deposit. vices.
Let me, then, quote from cer- amount.
and say that it is the deliberate In the Budget Debale held on
tain relevant paragraphs of his
Sheer Rudeness The Financial Secretary points view of the legal profession as FIL the 9th November, 1939, I renew-
report:---
+3 ed, for the third successive year, suggestions,
. We examined a great many
out that according to the revised whole that the zeal and vigilance Apart from the question of ad- We rejected, either estimate, salary tax will bring in exhibited by this conscientious ministrative machinery there have a plea that Government might be unanimously or by substantial majori- $1 000,000 as was anticipated: pro- officer have been so excessive In been numerous kind enough to make a substantial ties, by far the
complaints of greater number of perty tax $2,300,000 as against many cases as to occasion unjusti- sheer rudeness and offensive con- grant toe providing charitable and these proposals because they either did | $2,000,000 as was anticipated: flable delay, inconvenience and duct on the part of the officers of medical relief to the Chinese on not full the conditions laid down whilst corporation and business expense to bona fide applicants for this Department, 'Civil Servants account of the Sino-Japanese con-pur terms of reference or would yield tax should bring in $6,400,000 as legal representation.
should be civil servants' may be a I am indeed happy that theevenue too small to justify their in- Select Committee, with the unani- position,
The best alternative against $3.000.000 anticipated, But The powers conferred on the | familiar witticism, but I suggest
be adds, as regards taxation imposing
the latter Estate Duty Commissioner for in- that it embodies a wholesome ad- mous approval of the Unofficial
approximately the same Members, has agreed to put in, as
Incidence item:
"This figure includes not vestigating every estate are neces-monition to which Civil Servants The proposed Income Tax less than $5,500,000 in respect of sarily wide. under Head 5 Charitable Services, appeared
But I suggest that in in Hong Kong should pay serious tu bu a Combination of corporation profits and only wielding such great powers regard herd. A most unfavourable im- a donation of $10 000 to the British faxes assessed on property, on salaries $900,000 in respect of business should be had to the presence or pression has already been created Fund for the Reliet of Distress in and analogous themes and on business profits, which is disappointingly absence of grounds for suspicion on visitors to the Colony. And 1 China, Hong Kong and South Profifs made in the Colony on bases and
small. China Brunch
of evasion of duty, and that under de seriously appeal to offeers of at Pales I feel sure, St.
cafculated to impose very
Sir, this is the whole case for nurmal circumstances the Estate ine Immigrat on Department broadly the same degree of sacrifice on that the's gesture will be very the several elasses of persons affected.
suggesting that the principles on Duty Commissioner should not remember that they are being paid much apprecated by the Chinese. Sucti
20 combination of taxes would | which faxation is based should be attempt to reopen and resuscitate by local taxpayers 10 and my colleagues and tender constitute
performi a partial income tax. cover- reconsidered. I can see no ground; matters ag udicated upon a long their duties and not to show off our smiere thanks to Your Excel
not rouch the kreater part of the in- for surprise that the business pro-, time ago.
their own importance, lery.
CON which would be liable for a full fits tax should yield somethingi some tax Tut frend of many compli: Just under one million, as against ernment
It should be well known to Gov-
Ekranın DANN BU is its being partial in
that family inheritance the unexpectedly larger yield of has always constituted Sir.
in the extremely able anti pe and roly approximately adjusted
Corpuration profits Earlevdual alubiy to pay.
Mr lui perch of
Came: important part of Chinese family In parti Honourable
estar much of the enquiry into personal
never attempted anything ftend the Finatient Servetary, m
more life, and do submit that exces- Betreumstances which apprehended than a guess of the combined yield sive rates of levy, undue delay in introdus: the Budget. the trom the administration of income tax of the corporation and business, obtaining legal representation, and were certain observations on the should be avoided.
profits tax, for the simple reason harsh administration of the Estate War Revenue Ordmance With 11 it if anything more difficult that there were no accurate data Duly which
Ordinance. But before to assess the probable annual yield of available.
afl constitute I must deal
Nor can I see how the great incentive to evasion. doing 9. may I say how much these taxes than that of an income tax. yield of the taxes as above indicat-
May I tender our thanks to you, Sir. impressed I have been by the way but the estimate of Mr S. Catne, then
the invariable courtesy which you in whics he has carried out his
Financial Secretary, was as follows-
ed can afford any evidence that
nave shown to the Unofficial Members. the incidence is rot spread fairly Corpuration Prullis Tax }
My colleagues and I desir to pay unerous dutres as Financial Secret-
Business Profits Tax 1 $3,000,000
over the community. It may well ary du,ing the difficult and tur-
Sir, the Unofficial Members of warm tribute to you for the conspicu- Salaries Tax
1.000.000 be that, in order to produce more this Council, bulent times through which
ous ability which you have shown as as well as the Property Tax
2,000,000 revenue, some alterations will Chinese Members
His Excellency's chief adviser, which Colony has passed since the de-
of Councils, have to be made in the
is such a well known characteristic of Ordin-have had occasion to make various our esteemed Colonial Secretary, parture of his distinguished pre-
$6,000,000 ance. As I do not wish to anti-representations to Government on decessor? I veuture to say that
In comparing this with the cipate in any way the findings of certain aspects the frankness and candour with estimate of $10,000,000 from a full the Committee which Your Ex-Administration during which he has always treated the income tax it should be remem-cellency has reconstituted 1 ab- year. Pending their final outcome paid and fhe views I have expressed.
Budget Speech
Toy
the
Unofficial Members of this Coun-bered that
*
won Bul Several important
[]
com-
com-
stain from further comment.
Serious Criticism
રી very
Administration
Complex Problem
to
It
Sir, I do say deliberately that either the administration of the Iranigration measure is radically improved-and I submit that that measure should be dropped can, and should, be improved-or
altogether,
tox
My colleagues on this Council desire
of Government me to state that they wikh, to associate the past themselves, with the tributes I have
I feel it my duty to make a few in due course Honourable Mr. Tam will speak on the question of removal of general observations.
night-soil and the prevailing inwlessness and Insecurity of the Colony, and Honourable Mr. Li will speak on pelin- ary education, and I desire to express my concurrence with their views on these subjects.
To begin with I wish to say a I regret that I now come to a few words on the question of Food point of serious criticism against Control. the administration of the War Re- The task of a Food Controller venue Ordinance. In the Report is obviously one of very great dif- of Mr. Caine, to which I have`re- ¦ ficulty, and due allowance must ferred, he made it quite plain that be made for the fact that many "Partnerships will be assessed as things would have to be done in a a whole and no enquiry whatever hurry. will be necessary into the division of profits between partners". The Honourable the Financial Secret- ary himself, in introducing Bill in March, 1940, said:
The third and fourth taxes are pectively
a corporation profits fax and a
business profits tax on profits made in the Colony which is levied
this
cil, and the courage, ability and (a) Income subject to United devotion to the financial interests Kingdom Income Tax is almost of the Colony, which characterise | entirely exempted under the new all his official actions, have their united confidence, admiration panies are thus outside its scope and respect.
altogether. Nuw, to return to the Honour- (b) Profits tax will be applied able the Financial Secretary's ob-only to profits. made
Hong servations.
Kong, whereas income tax would The Honourable the Financial have applied to all profits of re- Secretary, iu his Budget speech sident persons, including on the 16th January, 1941, quoted panies registered here, wherever some remarks he had made when | made. he introduced the War Rey enue!
(e) Other income from abroad Bill in this Council in March of will not be taxed at all under the the preceding year. These re-new Bill marks I can only danning The Ordinance with faint pruise. He proceeded to say It was, however, repeatedly em- that Government felt "in view of phasised by the official represen- on the business and not on individual the change in the financial posi- tatives on the Committee that persuns so that no enquiry as to the tion and the situation disclosed by Government was not seeking
ownership of the bustness and the divi the actual receipts from the four
raise any particular sum of money War Taxes that the principles on but to impose a reasonable bur which the taxation was based den of taxation and we consider towances.. should be reconsidered".
that the rates of tax proposed do Now, what are the facts? After impose such a reasonable one of the bitterest controversies den. which the Colony has ever known, "8.
taxes
was
describe
of
;ና Reasonable Burden
10
t.
GENERAL.
the
cumstances.
to
res-
sion of the profits is involved. There
examiners
com.
Fully realising the true character of the struggle now being waged by Bri- tain and her Empire, the Chinese in the Colony have willingly and, indeed, enthusiastically cooperated with Gov- ernment in all measures which. Govern- ment has deemed it necessary to carry out in furthering Britain's war effort. 10 the calls whether by responding
I submit that the indispen. sable qualification of any Food Controller must be some merelal knowledge and expert-made for service An the Volunteer ence, and, however well quali-Corps. Police Reserve. A.R.P., Fire fied in the theory of economics Auxiliary Service. St. John Ambulance, and conscientious in the dis- etc.. ete, or in other directions. charge of his duties, the present view of their deeds 1 trust, Sir, that it Food Controller has had commercial experience.
troller has
now
no
ness man more conversant with
Firewood Ramp
I come now to the question of Firewood.
I understand that Government has at long last taken, or is taking,
In
is got necessary for me to pledge to you once more the willing continuance of that cooperation.
MR. LEO D'ALMADA:
The Hon. Mr. Leo
d'Almada
taxes were to be used, has been collected at the source, it is. ultimately accordance with the solemn de- definite steps for the importationment of our resources for food
fulfilled.
Revised Estimate.
The record of his administra tion has not inspired confidence is, in the circumstances, ho deduction
that in an emergency all will be In respect of personal and family al-
well as regards the question. of In spite of the history of this Council my grave doubt as to his
INQUIRY NEEDED food supply, and I record in this bur-matter, and of the official declara- ability in turning over certain re-said: From the point of view of a
tions to which I have referred. I We therefore recommend that
serve food stocks though. the the Bill was intreduced to this Government should proceed with mea-
am sorry to have to state openly quantities purchased are infinite. Kowloon resident there is much in this Council that Council on the 14th March, 1940, sures on the lines of the attached Bill,
There is generous provision for with the unanimous general ap-If the revenue obtained is inadequate have sought to get Chinese firms simal to the quantities originally in this Budget that is gratifying.
proposed-without very serious proval of this Council. The state- consideration should be given to the to disclose the names of the part-losses arising.
resurfacing our rouds, work adaption of some ments published from time
ur all of the items ners constituting the firms, I
We know that the Food Con- which is long overdue; a new pub- referred to at the beginning of para- should have thought it impossible time in the Press as having been graph 4:
lic mortuary and disinfecting sta- that
delegated his made by the War Revenue De-
алу Government official
tion is budgetted for; the promise partment that the levying of the on "Principal differences between the fundamental
In a note prepared by Mr. Caine would proceed counter to one of powers in regard to rice to a busi- of a police station for Kowloon
bases proceeding smoothly the War Revenue Bill' and
of the the subject.
Tong raises a hope that that district would appear to point to the gra-Income Tax Bill" he states:-
the taxation, and I look to the Hon-
and the Prince Edward Road area tifying fact that the hope express-
ourable the Financial Secretary.
will enjoy some meuşure of police ed by the War Revenue Commit-
as the Commissioner under the "An Income Tax seeks to tax every War Revenue Ordinance, to see to
protection in the near future; and tee, and re-echoed in this Council, source of each individual's income and it that his subordinate officers do
an agricultural station in the New that there should be no attempt to make allowances for his family res-
Territories shows that here again at evasion In view of the purpose ponsibilities and other individual cir- carry out completely the spirit of
Government is at last paying some heed to those who have con- for which the proceeds
ay be the framers of the legislation, in Although much
stantly advocated the develop- an Individual tax and may entail much clarations of Government. enquiry into personal affairs.
The Honourable the Financial of firewood into the Colony. The production, "The new Bill proposes to take each Secretary has intimated that Gov- Chinese Members of Councils had It is regrettable that the Un- of the main classes of income separate ernment proposes to increase the urged Government to take such a officials in Select Committee have ly and tax them at rates adjusted only Although, the yield under this approximately to capacity to pay. At
Death Duties. I appreciate that step even before His Excellency thought it expedient in the light Ordinance was originally, estimat-sone sacrifice of the refinements, of ar
Honourable Members will have an Sir Geoffry Northcote left the of the present situation and of
of
Colony on leave. On August 3rd, the Colony's finances to curtail to discussing ed to be six million, the revised income tax. It thus avoids many pro- opportunity
this estimated yield is nearly ten millon of these refinements and removes omending Bill blems which, arise in the administra-question when
1940, a the
memorandum on necessary
some extent the proposed public Hion (which incidentally, is the some of the features of income tax Council. But in the meantime I ment, wherein it was urged that mainland and, in Hong Kong but before this question was sent in to Govern-works expenditure both on the amount of the estimated yield for which are objectionable to the public." wish to make a few general ob- Government. should requisition the majority will agree that in 50 the full Income Tax Bill), and this in spite of the fact that it is Mr. Caine. He had made it plain
of servations.
steamers. for the purpose of im doing the Committer has follow- The Report of the Taxation porting firewood into Hong Kong,
and prudence. of a tax, of this kind can never be income tax measure. But he him- Paper No. 2, 1939, contained the has every reason to be dissatisfied brought to full fruition during the self was the author of the Ordin- following observation on the ques such a lengthy period, in rellev
with Government's inactivity, over Budget. first few years.
Lance now, in force, and: he put it tion of Death Duties:- Personally I should have
forth, as a compromise measure Any further revenue under this heading the acute shortage of firewood, thought that such an unexpected without, any, trace of reluctance, should be obtained by an increase in which has caused so much hard and gratifying result of a measure and certainly without any misgiv- the rates of Estate Duty rather than by ship to the community, especially which ads received: such striking ings as to there, being any inequity the introduction of other, methods, of the poor unanimity of support in this Coun in its Incidence
taxing property, on death, e.g. Legacy cil: would have merited an ac- The Honourable the. Financial the present rates, which, were fairly is the administration of the Im- Another matter, Sir, which has or Succession Duties: but we consider given rise to grave dissatisfaction, knowledgment from Government Secretary, said: "Although the War recently increased to a maximum of more gracious and fitting than the Revenue Ordinance has secured 20 per cent.. high enough In the cir-migration Ordinance. When 1 I do not know what Govern- strictures, which the Honourable considerably more revenue than qumstances, of: Hong Kong. where the spoke in this Council on the Sec- ment feels about its lasts twelve the Financial Secretary felt bound was anticipated it has failed to much higher rates: prevalling in 6.g., ond Reading of the Bill I thought months administration in this ange: more to pass on itin auk secure enough to meet the revis- the United Kingdom, would add greatly that the effect of this measure on Colony. In my opinion, apart from Secretary observed that far be it current year or in 1941-42”.
The Honourable the Financial ed war expenditure either in the to the incentive to evasion.
the Colony depended very largely revenue, there is little room for That report was dated 5th April, on how it would be, administered complacency, much less for cons from him "to seek to resuscitate a
1939, and I am not aware of cir- by the Immigration Officer, and I gratulation. cumstances which have arisen be- then stated that my colleagues will mention only three mat- tween then and now which render and I intended to maintain a close, ters, as to which Government han that deliberate expression of view Interest in the operation of this laid fueldopane, koima dalam no longer sound.
I measure, and that we should have l
(Continued "on,Rabe,
Such. Sir, were the views
as
this
universally accepted that the yield that he was in favour of a straight | Committee published as: Sessional 1 teal that the Chinese communited; the dictates of commonsensc
controversy which, is dead and Contrary, Stand burled". I am entirely with him'
in this altitude. But fuay. Tyre Pausing here I should like to mind Honourable Members of cer-point out that the position he now
This is all have to say on the
Our annual Budget debate, how- ever, has long been regarded as the proper occasion for the venti- lation of grievances and com- plaints, and of these I have a few. Government's Failings