CONFIDENTIAL.
(1)
Enclosure No. 2.
76
MEMORANDUM
on the present increases in taxation and the
probable effect on the trade of Hong Kong.
Two questions naturally arise:
(1) For how long will this scale of
taxation remain unincreased? and
(2) Will Likin really be abolished?
The effect of an original import duty
of 12% on the actual consumer of the article
-
on
the man in the street is comparatively insignificant.
The Chinese is a multiple buyer on an extremely small
scale. What he needs he will buy, and the increase
of a few cents in the dollar will be a small
deterrent. Similarly 30% on luxury goods will not (presuming the list, once determined upon, be adhered to) to any great extent deter those classes who can
afford such articles at all from paying an extra
one-third. That which is needful to a prosperous
conditions of trade is, however, that the merchant,
that is, the whole-sale importer, shall understand just what taxing his business is to be called on
to bear, further it is a great need that such imposts to be as far as possible consolidated in a single payment and the administration of collection as
much as possible centralized in one place. it
is, in short, any uncertainty regarding charges to be
met
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