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3
5. The expenditure for the year was estimated at $29,787,855 so that even with the above extra taxation the deficit amounted to approximately $2,300,000. It was therefore decided that the basis of conversion of sterling salaries into dollars should be altered, being converted at the Treasury rate of exchange and at 18/6d. to the dollar. The estimates having been prepared on a basis of a 18/4d. dollar the adop tion of this plan effected a reduction of $388,000 in the expenditure reducing the estimated deficit for 1931 to $1,912,000. The opening rate of exchange for 1931 however, 18/0ğd. to the dollar and it was evident that having already budgeted for a deficit on the basis of a 18/4d, dollar, something had to be done.
It was estimated that the fall in the dollar from Is/4d, to Is/- would increase the expendi- ture during 1931 by $1,838,000, allowance having already been made for the payment of salaries in the above manner.
was,
6. Adding this increase to the deficit of $1,912,000 made an estimated deficit on the year's working of $3,750,000, an alarming figure. Steps therefore had to be taken to reduce expenditure and the Estimates were accordingly pruned to the extent of $950.000 principally by reductions in Public Works. In addition to this extra revenue was obtained by the following increases.
1. Opium prices revised as from 13th Feb., 1931, then estimated to produce $166,000 2. Liquor duties from
3. Tobacco duties from
4. Postal rates from
19th Feb., 1931.
19th Feb., 1931.
1st April, 1931,
350,000 928,000
150.000
7. The surplus balance, therefore, of $9,361,679 on the 1st January would be reduced to $7.418,879 and it was considered that having regard to the abnormal fall in the exchange it would be better to wait for a few months before any further steps were taken. Meanwhile it would be seen whether the estimated receipts from the new Taxation were maintained and the question of increasing various fees and licences explored. Generally speaking the fees, licences and charges for services rendered by the Government were fixed when the dollar was valued in sterling at from 1s./8d. to 28./6d, and the fail in its value to approximately 1s./- necessitated an ad- justment. In many cases the fees and charges were of minor importance so far as actual revenue derived and it is not proposed to give in this memorandum a complete list of the revised scales. They are, however, shewn in Appendix A. The following table shews the most important changes.
Description of Licence or Fee
Old Rate
New Rate
Dangerous Goods Game Licences
Pawnbrokers
Court Fees
$1,5001
$1,000
$ 400)
$2,500
Graded
New Rate effective from
1. 4.32
Estimated at.
of increase in
full year
$2.00
$10 & $100
$ 7,000
$10.00
$25
81. 8.31
5,600
$2.000
27. 8.31
125,000
$1,000
$ 500
Graded
Gruded
17. 7.81
14.830
Gunpowder Storage Fees Motor Ambulance Fees
Graded
i
9. 1.31
9,000
$3.00
$5 & $10
14. 9.31
6,500
Official Certificates
Graded
Graded higher
81. 7.31
4.700
Graded
Graded
1. 1.31
26,000
25%
Rates doubled $8 & $2
$20 & $3 Varying rates Varying rates
Graded from Giraded from $6 to $60 $8 to $75
20%. 10%.5%, 25%, 20%,
15%. 10%.
884%
1. 9.31
10,000
1. 9.81
8,000
On renewal
60,000
of Permits
4. 9.81
19,000
i
1. 9.31
1. 9.81
10,000
8,000
$1,594,000
It should be remarked here that an interesting innovation was made in Hong Kong taxation by placing Liquor and Tol: ceo Duties on a sterling basis. The resolu- tion runs as under "Provided that the dollars and decimals thereof stated in the table "shall be conventional dollars reckoned as the equivalent of one shilling and eight "pence sterling; and that consequently to arrive at the actual amount payable in "Hong Kong currency the conventional delar stated in the Table shall be multiplied “by 20 and divided by a figure settled by the Colonial Treasurer from time to time "representing the average opening selling rates for the previous month of the Hong "Kong and Shanghai Banking Corporation for demand drafts on London and until **so settled the figure shall be 11.37".
The effect of these proposals may be shewn as under :---
Public Schools Fees Trade Marks Registration.. Police Services Permits for Encroachments
Moter Rentals
Miscellaneous Services,
P. W. D.
Water Service Fees
8. There still remain under consideration various other Licences and Fees but even if these are brought into force immediately the effect on this year's revenue would be small. It is estimated, however, that the amount to be derived from the increases at present in force will amount to $82,100 this year and to $313,130 in a full year. As the year grew it was evident that the revenue was being well maintained and that a substantial increase was being recorded against the original estimate as the following figures show.
Revenue.
Expenditure.
Original Estimates
Additional Taxation
.$27,480,000 1,594,000
Original Estimates
$29.780.000
Addition required for
sterling commitments.. 1,838,000
29,074,000
Savings
Total 1st
Principal Sources of Revenue,
Estimate 1931.
1st Quarter.
2nd Quarter.
half year.
Assessed Taxes
$5,665,000
Stamp & Estate Duties
3,473.000
$1,430,568 850,080
$1,400,838 933,274
$2,831,406
1,783,854
31.618,000
Tobacco Duties
2,800,000
746,786
729,297
1,476,083
950,000
Liquor Duties
1,600,000
577,200
552,458
1.129.724
Opium Monopoly
2,700,000
769,436
755,416
1,518.852
Water Excess & Meter
30,668,000
Rent
850,000
285,600
183.478
469,087
Postal Revenue
1,030,000
293,566
333,022
626,588
Delicit
1,912,800
$30,956,800
Add 20% M.C. on addi-
tional Revenue
Wireless Message Fees
330,000
180,651
162.784
343,385
318,800
Land Sales
1.500,000
569,320
869,976
1,429.296
$30,986.800
The total revenne for the half year ending 30th June, 1931, amounted to $15,812,386. This was $2,068,007 more than one half of the estimate of $27,488,750 for the whole year. The revised estimate for 1931 has been placed at $31.204,368 or $3,715,609 more than the original estimate. If, however. Land Sales are maintained at the same average as during the first six months the revised estimate will be exceeded.
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