1
a
PAGE 2-HONGKONG DAILY PRESS,
FRIDAY, NOvember 10, 1939.
CHINESE OBJECTIONS TO PROPOSAL EXPRESSED
BY MR. T. N. CHAU
The Hon. Mr. T. N. Chau, Senior Chinese Unofficial Member, sald: Sir-As the draft estimates of expenditure for 1940/41 have been carefully considered by the Select Committee, I personally have no observations to make on the ordinary budget.
41
In the Chinese, business com. vide any encouragement. There munity the conception of profits arise numerous questions of re- on investment' differs fundamen- funds, rebates and allowances which tally from that which is essential will have to be considered, as in for the assessment of the Tax. the vast majority of cases such am aware that there is an increas-class of income will not represent
COMMISSION AGENT
As regards the war budget, it is tained or, on the other hand, ing proportion of Chinese book- the sole sources. first of all my duty to the Chinese evade the most vigilant inquiry, it keeping which approaches Euro- community to dispel any impres- is hy view that without an an-pean methods, but the bulk of In this Colony, except perhaps.."
answer Chinese business, whether cun. in the case of foreign employees. slon which may have got abroad swer to this question, an that the motive behind any oppo- which would enable us to distin- nected with production or industry Instances must be comparatively sition that has been publicly or guish conditions in this Colony or with that preponderance which few where income is derived mere-
described 35 general privately expressed to the institu- from countries where the experi- may be
ly from a single source. We are, tion of a tax on income reflects ment has failed, we are not just-trading, adheres to the systems therefore, invariably thrown back. any reluctance to raise a special fied in proceeding with the matter. which, although taking care of the for the purpose of assessment not specific profits on output or sales, only of income but of allowances, capital contribution to the War
LITTLE SUCCESS IN MALAYA Funds of the Imperial Government. It is known with what little do not take cognizance of general to investigate each individual case. The suggestion that the comments success the attempt to introduce pronts on enterprise:
As an example of one class of or even criticism, however strong. Income Tax in Malaya hai met, might be construed as revealing but what is still more important is is issued a combined Balance Sheet difficulty, I am reminded of the Income and Expenditure very large proportion of the busi- any general attitude of antagonism the evidence from China itself by the Chinese, fortunately comes where the Income Tax Laws, which Account in which what is consi-ness transacted in this Colony by dered as the capital may be what is known as the "middle from a source which we have all had been most carefully worked
increased or decreased but inman" or commission agent, the learnt to regard as committed, as out, have proved to be an absolute a matter of polley, to systematic failure almost from the time of which the "profits for distribution" person who buys and sells not for his own account but passes money as such are not shown. ..." distortion.
}
their institution.
In unincorporated partnership
and
||
THE MERCHANT
the outside business flows from
and "the
In a large number of cases,
matter of record büt are.
It would be interesting to know to what extent the preliminary
I need perhaps not remind essentials and qualifications, made
To those who claim that the after making certain recognised As representing the Chinese I do not think it necessary for
Information required for assess-deductions. I would be surprised community, and by that I mean me to put forward any theories for not only those whose loyalty arises these fallures, but I do repeat that ments may nevertheless be easily to hear that the total income from from their British birth but all who a very clear explanation should be extracted, and to those who main-this class of business could be as- accuracy, by inspecting all have enjoyed for either longer or the starting point and not an inci-tain that a partial transition from certained, with an approximation shorter periods the privileges of dental matter for "our own dell-the present methods has been to
envisaged, I would make the same transactions involved eltizenship in this Colony. I have berations. to refute in the most unequivocal The Taxation Committee ap-reply, namely, that all who are records kept by the principals in terms that such opposition, as has pointed by Your Excellency in qualified to speak in such matters such transaction.
deny that such transformation already been volced against the October, 1938, had already, as I
appears feasible, except perhaps helther of the principals carries on Introduction of income tax, is asso-will admit, a background of very at the expense of much confusion business in this Colony. Whilst on ciated with any unwillingness to abnormal conditions in this Co-
this question of commission, it must be well known that in each share in full measure whatever lony. arising out of the Sino- and ultimate defeat.
had sacrifices which are being claimed Japanese hostilities which
In spite of marked and, we hope, business and indeed in many pri- from all citizens of the British then been in progress for over a Empire.
year. That part of their Report permanent Industrialisation which vate transactions, there are re- I go further and say that far which deals with Income Tax can-has been noted in recent years, the cognised deductions which are not
foundation of the Colony's business a from the adoption of any hesitant not, therefore, be said to have is still the merchant through whom nevertheless, an essential. attitude towards the raising of a ignored entirely the unusual com- situation special war contribution by this mercial and financial Colony, it is the general desire of which then existed and might world to and from the mainland. the Chinese community to see that continue for an indefinite period. in due course such a contribution It is, however, worthy of note Your Excellency that the book by the Taxation Committee would be made and in a manner which that in furnishing replies to a keeping for the average Chinese have been augmented or empha- will be worthy of and do credit to number. of practical difficulties in merchant is divided into two very sised had it been asked to report the loyalty of all sections of the the institution of Income Tax re-separate compartments. There is on this particular subject under the general recording of transac-the conditions imposed on this community of this Colony,
lating to questions which the Committee itself had raised, a very tions with the world at large which Colony through being itself invol- SENSIBLE OF NEEDS The Chinese community is far strong note of caution was sound-is dealt with by the employees of yed in a state of war. I venture what is known as "the outer to surmise that what little encour- from being insensible of the urgent ed. and I desire to refer particu- and special financial needs of the larly to certain preliminary and counter", but there is an additional agement that Report may have set of books which are kept in given to the Government for the Colony, and they realise that these conditional recommendations.
"the inner counter" by the pro-introduction of the measure now, These Include the absolute call for consideration of new me-
necessity for a detailed investiga-prietor or partners of the business would have been replaced by a thods of raising revenue.
The opposition to the introduction of the whole held with the maintained under conditions of solemn warning against it.
extreme privacy, to which no
REFUGEE CAPITAL tion of Income Tax which it is my assistance of an "expert", and to
Attention has been sumclently drawn to circumstances.
the transitory and duty to emphasise, is based on the this I would personally add the employees have access under any firm conviction that Its practical maintenance of numerous experts,
We must try to realise that an migratory nature of the capital- Implication is so fraught with far beyond the preliminary or
official invasion of the "inner refugee capital, if I may so des- difficulties, that it will not only introductory stages. And further, fall in its object but may bring in the Committee recommended that counter" means to a Chinese busi-cribe it-which has found its way this Colony in the last two its train repercussions and compli- the imposition of this form of Taxness man a great deal more than to
business years. Investment and enterprise. cations in spheres which might not should be preceded by the forma- secrets. To understand
we including the transfer of manu normally be associated with the tion of a large and substantial should appreciate that this pri- facturing plants to Hongkong, has
body of favourable opinion in this collection of revenue.
vacy, which is traditional, has no been stimulated by a profound Were the dimculties with which Colony.
The experts whose reports I origin in any attempt to evade sense of security and by satisfac- we are faced only of a practical
taxation ΟΙ to mislead officialstory appraisement of the benefits nature I would consider any form should like to hear before this
inquiry. It is not a question to be derived. A disturbance of
Bnd did not matter proceeds any further, are of opposition which
calculations
estimates attempt to offer any solution as not those who can assure us how merely of disclosure of business the being inadequate, but as I am successfully Income Tax works in secrets, of sources of supply or of which have preceded these war- convinced that this revolutionary other communities, but why it has customers, but of the breaking time investments will undoubtedly method of raising revenue in this failed amongst Chinese communi- down of a traditional element in involve a consideration of alter- Colony is going to place us in a ties. As for those who would be business procedure which has been natives when it should of course,
our object to regarded for centuries as a funda-be the responsible for administration of mental form of security, and with advantages which this Colony so position where not merely prosperity but the whole financial Income Tax they would all have to it would go a degree of confidence sorely needed. structure may be imperiled, I be persons with expert training which might undermine the whole I endorse the remark made by must deprecate even prolonged and much experience..
structure of business life."
the Hon. Senior Unofficial Mem- considerations directed towards The hope of obtaining such
It may be said that the assess- ber that the unanimous opinion solving the various practical dif- advice and permanent assistance ments would depend only in part of the Committee and Members of culties, many of which have been does not, under existing conditions, on the investigations of books, and the Hongkong Chinese General already voiced by public bodies appear at all bright. The alter that there are considerable sources Chamber of Commerce is adverse
and in the Press.
native of procuring officials who
NEVER EQUITABLE
the disclosure of his
this
retain the
I feel that in considering the have to gain their experience at om which reliable and "indisput-to the mstitution of income-tax in able Information 13 available. this Colony. A copy of the Cham- question of Income Tax in this the expense of the smooth working These include income from public ber's letter has been sent to Colony, where the Chinese business of the system, which should be
investments, public or private Government through the Hon. population predominates, we should guaranteed from its initiation, is a companies, from house properties, Secretary for Chinese Affairs.
way of maintaining ita exercise a sense, not merely of sure
I will conclude, as I began, with mortgages, salaries (which are a scientific but more particularly of unpopularity.
matter of record by employers). an assurance that the responsible what I might describe as "psycho-
and all income which is remitted elements of the Chinese commun- logical" economics,
I am convinced that the ma- from abroad and which passes ity are prepared to assist in every We are faced by the undeniable jority of the Chinese community through recognized channels such way they can in finding a solution fact that the introduction of In-belleve that it will never be as Banks.
to the urgent and special financial come «Tax in a wholly or predo possible to approach that ŝtage Whilst not agreeing that the problems with which, the Colony Liinently. Chinese community has at which the incidence of the Tax preportion of these sources is as is faced. always proved a fallure and as, falls fairly and equitably amongst large as anticipated, the ability to Numerous methods of raising obviously, there is a reason for those who should contribute their tax that source does not, unless I revenue alternative to Income Tax this which might be easily ascer more or less towards it.
misunderstand the situation, pro-have already been suggested, and