1)
25
3.
should be converted at the arbitrary rate of $1 - 18/6a (C1 $13.33), for the second quarter at $1 18/534 ($1 =
* 18
for the third quarter at $1 -
($1 - $13.91),
18/44d (£1 - $14.54) and for the
fourth quarter at $1 = 1
18/33d (£1
$15.23) unless the Treasury
(local) rate for the month of payment should have risen above
the quarterly rate so fixed. In addition the "cut" appropriate to the officer's sterling salary would be levied.
From 1st January 1937 conversion would be at Treasury
rate and only the "cut" would remain.
These proposals sound very drastic but they are designed
There is a
to do justice between officer and taxpayer in the light of the facts which are that when a sharp fall in exchange occurs the cost of living in Hong Kong does not rise pari passu. lag which has for the purpose in hand been taken at a year, partly because that is the period under review and partly because there are definite grounds (see paragraph 8 below) for viewing the financial position after 1936 with less anxiety.
5. Let us now examine the effects of these proposals first on the officer and then on the taxpayer. For the first purpose it will be convenient to take as examples officers on (1) £300, (11) £800, (111) £1,200 and (iv) £1,800 per anam respectively. Treasury rate is to be taken as $1 18/30 (£1 $16) throughout. Cut will be levied on net salary after deduction of Fidows' &
Orphans' contribution,
Officer (1)'s net salary is
Cut on this is £6 + £2,88
£8.88.
Leaving
or
£288 per ammum
8. 8g
£279.128
£69. 188. per quarter.
Under the scheme he will receive :-
$932.00
for the first quarter of 1936 or $310.66
per month. $972.52 for the second quarter of 1936
$1016.72 for the third quarter of 1936
$1065.14 for the fourth quarter of 1936.