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Your Reference.54307/147
Treasury Reference ... F. 16/10/02
TREASURY CHAMBERS,
GREAT GEORGE STREET,
LONDON, S.W.1.
9th September, 1947
(20).
(18).
Dear Palmer,
1. Thank you for your letter of 26th June which enclosed a copy of the Governor of Hong Kong's despatch regarding the Income Tax Ordinance which came into force last April. I am sorry that we have been so long in letting you have our comments.
2. In view of the Governor's despatch, we do not wish to press for any changes. You will no doubt watch the position closely and keep us informed, especially on the progress made in enforcing the tax. I should add that we take the view that in Hong Kong's present financial position, the 10% rate is only a beginning and that as soon as possible, the rate should be increased towards the original 25% target.
3. There are two other points. I note that property owners are being let off lightly because of the rent pegging legislation of 1941.
Are you satisfied that the rent restrictions in Hong Kong are effective. I seem to recall that some doubt was felt when we were considering increased rent allowances for government officers in the Colony at the beginning of the year.
•
Lechon qo
i
Secondly, it appears that Income Tax is to be charged only on income arising in or derived from the Colony. Are we therefore to understand that a person residing in Hong Kong but deriving all his income from sources outside will pay no Income Tax although enjoying the amenities and services of the Colony? As I presume you have sent Inland Revenue a copy of the Governor's despatch, I should be interested to learn what their views on this point
Yours sincerely,
are.
H. Palmer, Esq., 0.B.E.,
Colonial Office.
Du Super