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sent to investigate the matter, reported that Wan Chu Chang, the manager of Messrs. Butterfield and Swire's branch office, made sales of sugar daily to native merchants without paying the local taxes, and that, further, the goods were not reported to the tax bureax on arrival.
Under the provisional regulations approved by the Revenue Council, it is laid down that native goods imported into the newly opened murts of Manchuria viâ Tientsin, Newchwang, Antung, or Ta Lien Wan, on payment of the full export and half import duty, shall be entitled to a certificate exempting them from further payment, but that the goods are to be examined by the local tax office, and if certificate do not correspond, the said goods will be confiscated, and a fine of three times the half duty on the quantity as declared at the point of shipment will be exacted.
Further, the regulations laid down by the tax office are to the effect that all goods no matter what the nationality of the importer must pay the 7-4 li tax on sale to Chinese merchants-the exemption certificate only frees foreign merchants from payment of import duty and cannot surely free native merchants from payment of a tax on goods purchased as Chion, the deputy, points out these taxes are levied from Chinese merchants, and are no concern of foreigners. The tax office has, accordingly, issued a notice calling on native merchants in future to pay the 7-4 tax on sugar purchased by them from Wan Chu Chang who will, in future, not be held responsible for the payment.
As regards the amount of tax due from Wan Chu Chang for sales from the 12th moon of last year up to the 10th moon of this year this should be paid by the said Wan Chu Chung, and in future his goods must be reported at the tax office and examined before any sales can be effected.
The tax office, accordingly, request the taotai to address the British consul-general in the above sense, and I, therefore, beg to write you this communication.
(Translation.) Sir,
Enclosure 4 in No. 1.
Acting Consul-General Willis to Changchun Tuotai.
(Seal of Taotai.)
Mukden, December 9, 1910.
I HAVE received your communication with reference to the question of local taxation on sugar imported into Changchun by Messrs. Butterfield and Swire.
In my view the object of the provisional regulations was to protect goods no natter whether the importers Chinese or foreign merchants, and, I maintain, that goods imported into the open marts under exemption certificate, when goods and certificate correspond, are free from further duty.
I cannot possibly recognise, therefore, that sugar imported under exemption certificate by Messrs. Butterfield and Swire in accordance with the provincial regula- tions is liable to any further taxation, no matter whether the sales are effected by Chinese or foreign merchants.
Your Highness,
Enclosure 5 in No. 1.
Sir J. Jordan to Prince Ching,
Peking, April 21, 1911 ON the 10th December, 1909, the then doyen of the diplomatic body, his Excellency, M. de Kuczynski, addressed a note to your Highness in which he pointed out that the provisional rules issued in November, 1907, relating to the transport of foreign and native goods to the newly opened marts in Manchuria were not being properly carried out, and he requested that instructions might be issued by the Chinese Government to the Viceroy which would remove the just cause of complaint of foreign merchants.
On the 22nd February, 1910, the doyen of the diplomatic body received a reply from your Highness's board forwarding reports from the Viceroy of Manchuria and the Governors of Fengtien and Kirin. As regards Fengtien province it was denied that the "consumption tax" was levied when the goods and the special permit corresponded, but it was stated that in contrary cases li-kin was levied in passing customs barriers. In the case of Kirin province the governor explained the nature of the "business tax" which, according to him, was nothing to do with the foreign
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goods imported by foreigners, it being merely a tax on the business capital and selling turnover of Chinese merchants. His Excellency also proceeded to justify the levy of various other taxes in Kirin province on the ground that they are levied only on the property of Chinese merchants, and that they have been in force for some years.
After discussion of your Highness's note of the 22nd February, 1910, by the diplomatic body it was decided to refer the matter back to the consular bodies at Mukden, Harbin, and Antung with a view to obtaining more detailed information as regards the nature of the illegal taxes at present levied on foreign goods in Manchuria. From a report that had been furnished by the senior consul at Mukden the following description has been taken of the taxes complained of in Kirin province :---
"At Ch'angeh'un and apparently all over the Kirin province the following taxes are in force—
<
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(a.)Kuan chuan,' of '07 per cent.
(6) Chu chuan,' of '04 per cent.
"These are known as the 7 and 4 li tax, and are generally levied from the importer.
"(c.) Mai ch'ien chuan,' of '09 per cent. levied from the seller.
最
"(d.) Ying yeh shui,' of 1 per cent. levied from the importer.
(e) 'Hai shan shui.'
(f.) 'Special excise taxes are levied on tobacco, wines, and spirits. In the case
of tobacco the tax is 10 per cent, ad valorem.
"That these taxes have been and are still being levied on goods brought in under exemption certificate seems to need no specific proof.
The Kirin authorities openly assume the attitude that they may tax such goods as of right once such goods are in the hands of Chinese merchants."
In view of the above it is evident that, in spite of what the Governor of Kirin has to say on the point, these taxes do directly affect the foreign importer or his agent. Again, regulations drawn up by the bureau of business taxes were issued in November last, and enforced at the trade mart of Changch'un for levying a new so-called "business tax" on all imported merchandise as well as on exports of grain. By the expression "exports of grain" beans are presumably included, and I would therefore remind your Highness that beans are an article of native produce whose export abroad is not prohibited, and, as such, are according to the Japanese treaty of 1896, article 12, section 2, exempt from all "internal taxes, imposts, duties, charges, and exactions of all kinds" when purchased by foreign merchants in a treaty port.
As regards the illegal taxes which continue to be levied in certain parts of Manchuria under various names and pretexts upon foreign goods under exemption certificates the diplomatic body cannot admit that, as claimed by the Governor of Kirin and others, the Chinese authorities have a right to tax foreign goods in a treaty port or trade mart when once they are in Chinese hands.
:
The foreign representatives inust therefore repeat the request made in their note of the 10th December, 1909, viz. that the regulations of 1907 in their present form and the treaty provisions should be faithfully observed by the Li-kin and other provincial authorities of Manchuria, and that the Chinese Government will issue instructions to the Viceroy which will remove the just causes of complaint of foreign
I avail, &c.
merchants.
O
J. N. JORDAN.