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Page 150
(3) To consider, in particular, what form of taxation on incomes wouldPages 5dapd20he needs of such Pageral 5ysterfi,200- ing in mind the desirability of ensuring, so far as circumstances permit, a uniform practice throughout the Federal area as regards reliefs and allowances.
(4) To consider, in the light of the fundamental importance of en- suring co-ordination of loan policies, what arrangements could most suitably be made between the Federal Government and the constituent Governments as regards external and internal government borrowing.
(5) To undertake an enquiry into the internal and external problems created by a decision to establish a Customs Union of the three Terri- tories constituting the proposed Federation and to consider the means by which these problems can best be solved in the interests of the Federal area.
(6) To consider the steps which should be taken to bring the Customs Union into full effect as expeditiously as possible and at any rate within a period of not more than two years from the decision to establish such a Union.
(7) To submit recommendations on the above subjects to the Governments of Southern Rhodesia, Northern Rhodesia and Nyasaland, and to Her Majesty's Government in the United Kingdom."
In the matter of income tax the Conference noted from a study of other federal systems that it has in general been found best to arrange for basic income tax to be assessed and collected on a federal basis. It took the view that so far as possible income tax law and administra- tion should be unified. This would apply to all taxes on income.
2. Until the Fiscal Commission has submitted its report it is not possible to set out in detail what the financial arrangements for the Federation would be. They should however be on the following general pattern.
3. As will be seen from the terms of reference the distribution of Revenues income tax between the Federation and the Territories will be one of the of the matters on which the Fiscal Commission will make recom- Federation. mendations. In addition to any taxes on income which may be assigned to the Federation as a result of these recommendations and subject to any overriding considerations to which the Fiscal Commission may draw attention the Federation should have the following
revenues :-
(a) The produce of Customs and Excise.
(b) Postal, Telephones and Telecommunications revenues.
(c) Fees for services rendered by the Federal Government and such other revenues as may accrue to the Federation in con- nection with any matter within the jurisdiction of the Federation.
4. All revenues or other moneys raised or received by the Government Consolidated of the Federation will form one Consolidated Revenue Fund to be Revenue
Fund. appropriated for the purposes of the Federation in the manner pre-
scribed Page 151 and subject to the
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charges imposed thereby.
Charges on Consolidated Revenue Fund.
Audit.
Appropria- tions.
5. (a) The cost of the collection and management of the Consolidated Repenys Fund will Z a first charge onphung2 of 200
(8) The Constitution will also charge upon the Consolidated Revenue Fund the emoluments of the Governor-General, the Chief Justice and other Judges of the Federal Supreme Court and the Chair- man and other members of the African Affairs Board.
6. All such costs, charges and expenses will be reviewed and audited in such manner as may be laid down by Federal law.
7. Money will be withdrawn from the Consolidated Revenue Fund only under appropriation made by law but provision will be made on the usual lines whereby, in advance of parliamentary appropriation, money can in certain circumstances be made available to meet un- foreseen expenditure and to cover any period, not exceeding four months, between the end of a financial year and the passing of the Appropriation Act for the following year.
PART 2. BORROWING
1. The Fiscal Commission is being directed (cf. terms of reference (4)) to consider, in the light of the fundamental importance of ensuring co-ordination of loan policies, what arrangements could most suitably be made between the Federal Government and the Territorial Govern- ments as regards external and internal government borrowing. It appears that such co-ordination could best be achieved by the establish- ment of a Loans Council for the Federation on the model of the Loan Council of Australia which has executive powers over certain aspects of governmental borrowing. This Council would be repre-
sentative of the Federal Government and the three Territorial Govern- ments. It is envisaged that it would deal solely with government borrowing outside the Federal area by the three Territorial Govern- ments and by the Federal Government.
2. No final arrangements can be proposed for external and internal borrowing by the Federal Government and the Territorial Governments until the Fiscal Commission has reported on this matter, particularly as the question of loans is to some extent connected with the question of revenues.
PART 3. TRANSFER OF ASSETS AND LIABILITIES
In the course of its deliberations the Fiscal Commission will consider what assets and liabilities it will be necessary or desirable to transfer from the Territories to the Federation and the terms on which such transfers should take place.