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4.
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It was realised that an appreciable amount of tobacco from duty paid stocks was being exported into areas in South East Asia where the control of the local Governments had not been fully restored, and that directly the customs services in these regions were functioning normally exporters would be able to export ex bond. For this reason tobacco duty was estimated at $25,000,000 which allowed for a drop in receipts of $5,000,000. Unfortunately, however, at the time when this purely temporary benefit to our revenue ceased, other factors arose which caused a further drop in receipts from tobacco duty, and, in spite of a sudden spurt in the last two weeks of the year, collections just failed to top the $19,000,000 mark.
5.
Receipts from rates and licences were particularly satisfactory as also was postal revenue. Receipts from stamp duty were also unusually high, the tax on the increment on the value of property having produced $6,639,000 up to the end of February. This was, however, mainly collected during the first half of the year, receipts since the end of September having dropped considerably due both to a change in the basis of the tax and to fewer properties changing hands. The earnings of the Kowloon- Canton Railway exceeded the estimate by nearly $1,500,000 in spite of the adverse effect on goods traffic of a greatly reduced volume of imports into South China. Receipts from Earnings and Profits tax came in well during the latter portion of the financial year, and totalled $40,273,468 as compared with the estimate of $40,000,000.
6.
The revised expenditure figure is a little less than $9,750,000 over the estimate. This excess is mainly due to the payments which were approved towards the end of the financial year 1947-48 to Government employees who remained in the Colony during the occupation, and who were not interned. It was hoped to complete these payments before the 31st March, 1948, but this unfortunately proved to be impossible and it became necessary to issue a special warrant for $9,000,000 during the first quarter of 1948-49. Moreover, in spite of every effort the recessary adjustments resulting from the awards of the Salaries Commission with retrospective effect to the 1st January, 1947, could not be completed by the 31st March, 1948 and it therefore became necessary to provide supplementary provision during 1948-49 amounting to $8,600,000. Sums of $600,000 representing pensions, and $520,000 representing pay and allowances to local volunteer forces which had remained in Suspense, were charged to expenditure, a nd a further special warrant for $100,000 was issued in respect of an increase in the demobilisation clothing allowance from $450 to $600. This heavy carry-over of expenditure from the previous year was fortunately offset by savings under other heads, including a considerable saving under Public Works Extraordinary, as it did not prove possible to complete the full programme during the year. The nett excess over the estimate thus only amounted to $9,750,000.
7.
The year 1948-49 opened with a revenue balance of $37,063,396. If a surplus of $28,000,000 is realised, the financial year 1949-50 should open with a revenue balance of some $65,000,000.
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