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26.
TELEGRAM from the Governor of Hong Kong to the Secretary of 113
State for the Colonies.
Dated 28th.October, 1959. Received 10.42 a.m. 28th. Dot.1939.
No.373 Confidential.
5 Your telegram No.249 Confidential. Unofficial attitude towɩrds the income tax proposals has so far turned out much less favourable
than I had reason to expect when I submitted it to you. Chinese
though professedly willing to accept further taxation in order to raise large annual revenue for war purposes here and in Europe are opposed to income tax principally, as they admit, because of the disclosure of business secrets. Among the British Europeans there is a genuine desire to contribute to Great Britain's cause
nevertheless Committee of the European Chamber of Commerce has unanimously recommended the Government to impose new taxation
on lines other than income tax. No details of the Government's
proposals were before the Committee at this discussion. Committee
contains consultees of the Government after whose agreement that income tax should be imposed I sent my telegram No.324 Confidental.
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On the other hand every British and Chinese unofficial who has
been invited to sit on the Committee which will examine the
Government's present proposals in detail has accepted and I am not without hope that by means of explanation and compromise we shall gain. acceptance by the majority of the European Chamber of Commerce and considerable modification of Chinese opposition to
х the measure. It is too early to lay detailed proposals before you but I would be glad to know if you think that it would be
justifiable to confine the measure to the duration of the war either by including an automatic repeal clause which would, say, make the Ordinance inoperative in the next financial year after the conclusion of hostilities or by giving pledge now that income tax
would