H
37
(Colonial Office letter to hong Kong of 8th June, 1896). Referring to the items termed "Appropriation-in-Aids the Colonial Office said "Turning to those items of revenue.... treated as appropriations in aid, I would remark that they are in the nature of reimbursements towards expenditure most or all of which expenditure would have to be incurred if nothing were recovered by way of reimbursement. These receipts are therefore in our opinion properly treated as revenue and .......I can see no sufficient reason for deducting them from the total on which the contribution is paid",
14. D. Anti-Piracy Escorts.
The Colony provide anti-piracy escorts for ships proceeding from Singapore to Hong Kong and Shanghai and other China ports, for which shipowners pay a flat rate, calculated to cover the actual cost, In 1930, which was the first year of the service, disbursements and receipts were placed to a suspense account and the receipts were not therefore included in the assessable revenue, In 1931 the receipts and expenditure are included in the estimates and unless we concede the Colony's claim for the expenditure to be exempt, the gross receipts will be subject to assessment. (The Colony in calculating the military contribution for 1931 have assumed that their claim has been conceded), Exemption would mean a loss to the contribution of about £1,400 annually.
This amounts to a claim to exemption under Class II or III (see paras, 6 and 7 above). The anti piracy ascerts could be regarded as being in the nature of Police Service Loans (except that the escorts are specially prov:ded) for which the borrowers pay the pay and allowances of the officers loaned. The receipts (about 19,000) from the se Police Service Loans are included in the revenue.
On the other hand, the escorts are a service specially undertaken by the Colony outside its normal functions, although of advantage in securing the peaceful trade of the Colony in so far as one of the ports of call of the stormers is Hong Kong.
15.
E. House Service Account.
The Colony instals water supply and later (a matter of months) as the district develops recover the cost of installation fran the property owners. In the past the expenditure and receipts on account of this service appear to have been excluded from the general revenue and expenditure, but it is now proposed, for accounting reasons, to include them, and the Colony claim that the receipts should be exempt from assesment for military contribution. It is not clear what amount is involved and it would probably vary considerably, but it appears that in 5 or 6 months the receipts amounted to about $25,000. The gain to the contribution which would be lost if the receipts are exempted would be £500.
If this service has always been kept out of the general revenue account, which would appear to be the case, there is some ground for considering exemption, and regarding the item as a reimbursement of expenditure and not 'revenue in the ordinary sense (Class II above), particularly if the service existed when the percentage payable as military contribution was fixed, but we should ask the Colony to confirm this and whether there are any comparable services (e.g., roads). Incidentally, in connection with the Colony's
remarks/