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too much on the continued rapid expansion of the Colony's trade. Moreover, it was only possible to includc in the Estimates a tokon sum in respect of receipts from the Earnings and Profits Tax as the Appropriation Bill was passed by the Logislaturc before the standard ratc of the new tax had been fixed. In actual fact, the declino in Hong Kong's trado with China was offset by incroascd transit trade with other countrics in the Far East, and receipts under nearly every Head of Revenuc excecdcd the estimate. Factors which contributed to this result were incroascs in a wide range of licence focs and the continued risc in thc population which was reflected in largor receipts from import dutics.
Exponditure has boon rcvised to a figure of $120,071,359 as compared with the original estimate of $109,834,355, but it may, of course, bo necessary to reviso this figure further if tho allowance which has boon made for expenditure in London during the last few months of the financial year proves to be wide of the mark. This incrcaso in cxpenditure is wholly duc to the payment of arrears of salary to the Public Scrvice in accordance with the recommcnda- tions of the Salarics Commission. To moot the sc, Finance Committoo recently approved the issue of Special Warrants for $12,500,000. But for the paymont of the sc arrcars and tho fact that many members of the Service aro already being paid at the now rates, the rc current cxpenditure for the year would have been slightly below the cstimate. This under expenditurc is chiefly duc to savings under Personal Emoluments as a number of vacancies still remain unfilled.
The cxcess of assets over liabilitics at 31st March, 1948, based on the revised Estimates is $30,562,300.
Financial Year 1948/49.
as follows:
The position at the 31st March, 1948, is estimatod
Estimated surplus brought forward from 1947/48
$30,562,300
Estimated revenuc 1948/49
$150,847,950
Estimated expenditure 1948/49
$149,005,007
Estimated surplus
$1,842,943
Total surplus carried forward to 1949/50
$32,405,243
PART II - MAIN ASPECTS OF THE 1948/49 BUDGET.
REVENUE
The Estimates of Revenue are based on the revised Estimates for 1947/48 and assume the same basis of taxation. Allowance has been made for a possiblc falling off in trade during the year, of which indications are already apparent. The estimating of rovenue always prosents considerable difficulties, particularly in so far as itoms such as import duties and carnings and profits tax are concerned.
Numerous adjustments, robatos and ro-assessments are always made, and it is frequently quitc fortuitous that certain rocoipts are brought to account during a particular financial yoar.
Duties. The estimate of $40,050,000 is $2,150,000 moro than the original estimato for 1947/48 but $11,950,000 less than