8.
6
urgent consideration should be given to the whole question of increasing taxation so as to bring it more into accord with present-day requirements and with the scale of taxation applied elsewhere especially in U.K.
As regards the suggestion for Mr. Follows' visit to this country, I would put it that it would be most useful if Mr. Follows could pay a short visit to this country, as soon as he can conveniently be spared, to discuss the financial situation.
I would add that it would also be useful if he were then in a position to say what steps had been taken to resume the collection of revenue on the 1941 basis and what action had been taken in regard to the further question referred to above.
Z. S. Redman
(original on 55217/6/4/45/46).
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I think it would certainly be advisable to obtain Treasury concurrence in the draft opposite.
After speaking to Mr. Palmer who has no objection, I have made two amendments of substance to the draft:-
(1) While not disputing that the introduction of Income Tax in Hong Kong is not a practicable immediate measure to help reduce the deficit and that we should instead suggest/ the reintroduction of various special forms of war tax, I do not think that our savingram should convey any suggestion that we regard income tax as ruled out for the future. This is clearly one of those questions which it would be most useful to discuss with Mr. Follows if he can come here for a visit.
(2)
Paragraph 10 of the draft, asking the
/Governor