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HONG KONG LEGISLATIVE COUNCIL.
Whilst not agreeing that the proportion of these sources is as large as anticipated, the ability to tax that source does not, unless I misunderstand the situation, provide any encouragement. There arise numerous questions of refunds, rebates and allowances which will have to be considered, as in the vast majority of cases such class of income will not represent the sole sources.
In this Colony, except perhaps in the case of foreign employees, instances must be comparatively few where income is derived merely from a single source. We are, therefore, invariably thrown back, for the purpose of assessment not only of income but of allowances, to investigate each individual case.
As an example of one class of difficulty, I am reminded of the very large proportion of the business transacted in this Colony by what is known as the "middle man" or commission agent, the person who buys and sells not for his own account but passes money after making certain recognised deductions. I would be surprised to hear that the total income from this class of business could be ascertained, with an approximation to accuracy, by inspecting all transactions involved and the records kept by the principals in such transaction. In a large number of cases, neither of the principals carries on business in this Colony. Whilst on this question of commission, it must be well known that in each business, and indeed in many private transactions, there are recognised deductions which are not a matter of record but are, nevertheless, an essential.
It would be interesting to know to what extent the preliminary essentials and qualifications made by the Taxation Committee would have been augmented or emphasised had it been asked to report on this particular subject under the conditions imposed on this Colony through being itself involved in a state of war. I venture to surmise that what little encouragement that Report may have given to the Government for the introduction of the measure now, would have been replaced by a solemn warning against it.
Attention has been sufficiently drawn to the transitory and migratory nature of the capital-refugee capital, if I may so describe it which has found its way to this Colony in the last two years. Investment and enterprise, including the transfer of manufacturing plant to Hong Kong, has been stimulated by a profound sense of security and by satisfactory appraisement of the benefits to be derived. A disturbance of the calculations and estimates which have preceded these wartime investments will undoubtedly involve a consideration of alternatives when it should, of course, be our object to retain the advantages which this Colony so sorely needed.
I endorse the remark made by the Hon. Senior Unofficial Member that the unanimous opinion of the Committee and Members of the Hong Kong Chinese General Chamber of Commerce is adverse to the institution of income tax in this Colony. A copy of the Chamber's letter has been sent to Government through the Hon. Secretary for Chinese Affairs.
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