NOOX
CONFIDENTIAL(2)
15 MAR 104 0. 0.
54002/40
GOVERNMENT HOUSE,
21
HONG KONG.
5th March, 1940.
112
Sir,
21/0/39 24/-/39.
Library
encl. to Fired (31)
With reference to my confidential telegram No.373
of 28th October, 1939, and your confidential telegram No.283
of 8th November, 1939, on the subject of the proposal to
introduce Income Tax as a War measure in this Colony, I have
the honour to forward for your information a copy of the
Report of the War Revenue Committee whose appointment was
referred to in my telegram under reference. A War Revenue
Bill forms an appendix to the Report. Clause 60 of the Bill
provides that no tax shall be collectable in respect of any
year of assessment subsequent to the year of assessment in
which the war is terminated. It will be observed that all
members of the Committee signed the Report though three
appended reservations.
2.
While the proposed measure is a partial income tax
its incidence will not, in my opinion, be as equitable as
income tax proper and I must regard the Bill, which is the
product of a Committee, many of whom were laymen, as far from perfect as a taxation measure and as liable, even within its limited scope, to provide many opportunities for avoidance
and evasion. It is my view that in comparison with income tax it is no more than a "pis aller", but as the primary aim of the measure is to provide a gift to His Majesty's
Government towards the conduct of the war I consider that it should be accepted.
THE RIGHT HONOURABLE
MALCOLM MACDONALD, M.P.,
&C.
&C.,
&Cs