Enclosure No. 5.
HONG KONG
MEMORANDUM ON THE FINANCIAL POSITION
1930, 1931, & 1932,
by The Treasurer.
1930.
1. The revenue for the year amounted to $27,818,473 as against the original estimate of $22,712.920 an increase of $5,105,553. The revenue was well main- tained, all round increases being shown against each Head as compared with the original estimate. In view, however, of the fall in the sterling value of the dollar and the extra expenditure involved consequent upon the adoption of the Salaries Commission Report additional taxation was imposed as under :-
(a) Increase in Tobacco Duties with effect from 19th June, 1930
(b) A new duty of 15 cents per gallon on light hydrocarbon oils as from
1st July.
(c) An increase in the rates of postage as from 1st August.
2. Land Sales (Premia on New Leases) produced the large sum of $2,864,897 against an estimate of $1,000,000 and is the largest amount received since the record year of 1923. This is one effect of the fall in the sterling value of the dollar. Remittances from abroad were attracted resulting in a heavy reduction in interest rates on deposits, causing investors to turn to the purchase of land and to building construction as an outlet for their money. The Bank's selling rate for sterling opened the year at 1s/7.9/16d. and closed at 1s/1ğd.
to $28,119,646 as
on
3. The expenditure for the year amounted to
as against an estimate of $27,268,515. In the first place the fall in exchange accounts for con- siderably more than the excess over the original estimates which were based $1-18/10d. whereas the average rate throughout the year was 18/4.35d. Secondly, the adoption of the Salaries Commission Report added apart from the fall in exchange $1,000,000 for both dollar and sterling salaries. Thirdly, a special grant of $300,000 to the University and contributions of $300,000 towards the construc- tion of a vertical sea wall and $105,000 towards the Kowloon Tong Building Scheme. Expenditure was, however, reduced wherever possible and the total under expenditure on the Heads Public Works Extraordinary, Kowloon Canton Railway Extraordinary and Public Works Recurrent amounted to $1,622,257. On the innumerable items classified under "Other Charges" throughout the estimates a total saving of $979,792 was made. The net result of the above is that expenditure exceeded revenue in 1930 by $301,173 ad the year 1930 closed with an excess of Assets over Liabilities of $9,361,679.
1931.
4. The revenue for the year was estimated at $27,488,759, and was based on the following increases in taxation becoming effective as from the 1st January, 1931.
Assessed Taxes. 4% increase in rates estimated to yield $1,400,000. Entertainment Tax estimated to produce $300,000.
Light Dues estimated to produce $320,000
Increases in fees for use of Government Buoys, Sunday Cargo Working
Permits etc. estimated to produce $144,000.
Stamp Ordinance. Increase in receipt and cheque duty to 10 cents and bills
of lading to 40 cents yielding $178,000.
Estate Duties Ordinance. Raising the maximum percentage 8% to 12% producing $300,000 in a full year. This Ordinance, however, did not come into force until 28th February.
Public Schools Fees. Slight adjustment estimated to yield $19,000.
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