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method of raising necessary revenue exists.
6. It seems likely that in Hong Kong the most
effective way of substantially increasing
revenue is by raising the rate of Earnings and
Profits Tax. While I appreciate the reasons
why such a measure is not feasible at present,
it has not been suggested that these reasons
constitute a permanent objection to such a
measure.
7.
It was suggested in the course of
discussions with the Financial Secretary that one
direction in which revenue may be improved is by
further increasing the yield from assessed taxes,
another possibility being more stringent
legislation regarding estate duty so as to reduce
evasion, both legal and illegal. On the latter and
on other points it might be of advantage if the
Financial Secretary could consult with the Board
of Inland Revenue and the Board of Trade while he
is in this country, and arrangements are being made
to this end. (As you are aware, the Colony's
Commissioner of Income Tax has already been in
consultation with the Board of Inland Revenue.)
8. I will endeavour to secure settlement during the
present financial year of the claim of the Hong Kong
Government for over $2,000,000 from the War Office to
which you refer in paragraph 2-of your telegram No.677,
and will give what assistance I can in regard to the
claims against the Governments of India and Burma which
are referred to in the same place, and which are no doubt
the claims dealt with in your despatch No. 169 of the
17th July, 1948.
9.
Finally, I would refer to possible reductions in
expenditure. This was mentioned in paragraph 32 of your
despatch No.100, and I trust that reduction in the present
(16)
(18895/17/48)
(9)
rate