HONG KONG LEGISLATIVE COUNCIL.
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My Unofficial colleagues on this Council are unanimously opposed to income tax.
I confess that I find it very difficult to understand what justifica- tion the Government has for proceeding with the consideration of an income tax bill in view of the fact that those British and Chinese Experts have unanimously expressed themselves as being opposed to Income Tax.
Anybody who understands the mentality of the Chinese must realise that such a measure as income tax would be likely to cause the flight of capital from this Colony and to prevent new remittances from being made to Hong Kong and also that it would probably deter new factories and enterprises from starting here.
In connection with this latter point I may mention that I have been informed recently that certain Chinese, who had intended to start steelworks in this Colony, have, since income tax was mooted, abandoned the idea.
Other objections to income tax are that it would involve the trouble and expense of having numerous Chinese account books translated into English, and that its collection would involve the employment, at considerable public cost, of a large staff of new Government officials, and that the Chinese have strong objections to their private, family, and business affairs being pried into.
In the Taxation Committee's Report mention is made of the probable cost to Government of administration of income tax, but no consideration seems to have been given to the additional cost of book- keeping, records, legal advice, chartered accountant's fees, etc., that will have to be borne by any business in order to comply with the requirements of the Tax.
We have been told that income tax is enforced in Ceylon, but, with all due deference, that fact is wholly irrelevant, as conditions there are so entirely different from those existing in this Colony.
I fear that Your Excellency, in your desire for this Colony to make a contribution towards the War Gift to the Imperial Govern- ment, has not quite appreciated those serious objections to income tax which I have indicated and which will no doubt be stressed by other Unofficial Members. It is hoped, however, that Your Excellency who, in the course of your two years' administration of this Colony, has earned the thoroughly well-deserved reputation of being able to consider every side of a question, will, with the same impartiality, consider the arguments which are now being urged against the imposition of income tax, together with the suggestion that alternative taxes be imposed.
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