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DRAFTON 1450/39 GENL:
CIRCULAR TELEGRAM from the Secretary of State for the
Colonies to all Colonies, Protectorates and endated
Territories and Borneo.
(sent 4.30 a.m.
29th September, 1939).
CIRCULAR No. 72 CONFIDENTIAL.
My confidential circular telegram No.62.
I am
2
grateful for replies so far received.
2
You will now have heard main lines of war budget
here and have noted the drastic character of the
proposals which it contains. The taxpayer in this country
is being called upon to assume a burden of unprecedented
weight to enable the war to be pursued.
You will have
observed that the greater part of the increased revenue
is to be obtained from direct taxation.
Income tax is
An excess
to be raised to 7/6d, in the pound and there are also
heavy increases in surtex and estate duty. profits tax of 60 per cent is also to be imposed.
3. I feel that these new and unprecedented
sacrifices by the taxpayer here strongly underline the considerations set out in paragraphs 3, 4 and 5 of my
telegram under reference.
Apart from
In particular I feel that serious
consideration must now be given to the imposition of
income tax in Colonies where it does not exist and to
the increase of the rate where it does.
practical necessity of raising new money which is acutely felt in many Colonies there are in many cases political
reasons which will become stronger as the war goes on for adjusting the incidence of taxation so as to place the
burden
q
No ite
Kong
X
burden herd is can best be borne. I am of opinion
that Colonial Governments need not be unduly deterred from
imposing income tax by possible adzinistrative difficulties. Experience in many Colonies shows that these can be
successfully overcone.
The alternative to income tax vill I fear in many cases
prove to be a levy on official salaries.
440 I feel sure that I can rely upon you to take my
suggestions carefully into account, They call for
considerable sacrifices but such sacrifices are being made
in this country and I am confident that the Colonial Empire
will be no less ready to shoulder its share of the burden,