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HONG KONG LEGISLATIVE COUNCIL.
The 1941 revenue, excluding the War Taxation, amounted to $47,- 486,000 but it must be remembered that a number of measures de- signed to increase revenue were introduced in 1941 and the full effect of these is only being felt to-day.
Nevertheless certain measures to increase revenue have been taken since the re-occupation of the Colony. A surcharge of 20 cents per thousand gallons in respect of water has been levied. At the time this increase was made it appeared that it would just cover the cost of the supply. Costs-particularly labour costs-- have however increased since then and I fear that some further increase will prove necessary. A surcharge of 25% has been levied as an interim measure on port dues and the question of placing pilotage dues on a tonnage basis instead of on a flat rate is being actively studied. The basis on which mooring buoy dues are levied may also be changed and this will al help to increase revenue though the full effect will not be felt until 1947. Railway fares between Hongkong and Canton have been raised with a resulting increase in revenue from the British Section. It is proposed to undertake a comprehensive review of licence fees as a number of these could be increased without caus- ing hardship.
I should now like to refer briefly to the War Revenue Ordin- ance. Section 73 of that Ordinance provides that no tax is to be collected in any year of assessment subsequent to the year of assessment in which the war which began in 1939 terminated. The expression 'termination of hostilities" was not used so the Ordin- ance will continue in operation until a Peace Treaty is signed or until some declaration is made, possibly by Order in Council, that the war is at an end.
All taxes under the Ordinance are assessable on receipts dur- ing the previous year. The question of the date from which they should be collected or whether they should be replaced by a normal form of Income Tax is under consideration. It is possible that this Honourable Council may be invited to change the year of assessment to the calendar year so that tax may be collected from the 1st January 1946 by which date business had already been resumed though admittedly on a small scale.
Before turning to expenditure it is perhaps desirable to em- phasise that until this Colony is again self-supporting and ceases to be dependent on His Majesty's Government the latter naturally reserves the right to exercise a considerable degree of financial control. It was regarded as important that the Estimates should be introduced in this Honourable Council during the present month but I wish to make it clear that although the Council is being invited to approve certain expenditure His Majesty's Government are not committed to providing the funds necessary to meet it.
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