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HONG KONG LEGISLATIVE COUNCIL.
as to whether such a measure was, or was not, desirable, and whether alternatives to the measure could be considered. The answer was in the negative. I thereupon pressed for a communique to be issued to the Press, setting out the strictly limited terms of our reference. This communique was issued to the Press on November 7th 1939.
It was in these circumstances that I spoke in this Chamber on November 9th. I spoke not in ignorance, but with full knowledge, of Government's proposals. Apart from one point in my speech, to which I propose later to refer, I do not wish to withdraw anything I then said. My views have remained unaltered.
Your Excellency intimated in this Council on November 16th that you were prepared to widen the terms of reference of the Income Tax Committee, and the widened terms were officially communicated to the Committee at its meeting held on the following day.
Speaking for myself, I have always appreciated the point which Mr. Caine so eloquently made in his speech in this Council on November 9th namely, that no suggested alternatives could be acceptable which did not call for any appreciable sacrifice on his part, and that this remark was true of others in the higher income groups.
The task of the Income Tax Committee under its widened terms of reference was, then, as I conceived it, to endeavour to solve the difficult problem of placing upon the right shoulders the burden and privilege of the War Taxation, by means which would obviate or mitigate the grave objections raised to the Income Tax measure.
The Bill now before the Council is, Sir, the result of the Committee's efforts.
I do not pretend to say that the present Bill has surmounted all the administrative objections advanced, but I do say that, in my view, they have been very substantially reduced, and reduced in a way which would have been impossible under an ordinary Income Tax Bill. Nor do I pretend to say that all the possibilities of ill effects on the Colony have been removed. I can only hope that the rates of charge proposed by the Bill are low enough to reduce any such ill effects to the minimum. I know there In this regard I have one further observation to make. are various places in which an Income Tax is successfully administered. The refutation, by result, of the forebodings of the tax before its introduction in such places has been repeatedly used as an argument in favour of its introduction in Hong Kong. The validity of this argument depends entirely upon the similarity of Hong Kong with the other places. I maintain that Hong Kong is not similar.
I would therefore urge that the importance of keeping the rates under this Bill low, so as not to discourage the inflow of capital to, or its maintenance in, Hong Kong, should be borne in mind.
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