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conditions similar to those applied to salaries tax, but they
considered that this taxation should not extend to such
portion of an annuity as represents a return of capital. I
am advised that this matter of the taxation of the capital
element in annuities is one on which practice varies from one
country to another, but I have accepted the principle involved
in the recommendation.
13.
Certain omissions which were noticed just before the
Bill was originally published but which were not corrected then
in order to avoid delays in printing, have now been provided
for. These include the exemption from tax of wound and
disability pensions and war gratuities paid to members of
His Majesty's Forces. Provision has also been made for the
exemption from tax of the emoluments of members of His
Majesty's Forces.
practice.
14.
This follows normal Colonial Income tax
In order to impose such a measure of higher taxation
on higher incomes as is possible under the present system of
taxation, the scale of incidence under salaries tax and
personal assessment had been increased in the Bill as
originally published up to a maximum of twice the standard
rate. But a member of a business firm who is paid partly in
the form of salary but principally by participating in the
profits, would naturally not elect to be personally assessed.
In order not to penalise a salaried individual as compared with
such a person, the committee recommended the insertion of a
proviso to the effect that in no case should the total amount
of tax chargeable on any individual exceed the standard rate
on the whole of his income before deducting any allowances.
15. In considering the question of personal allowances
the committee gave special consideration both to the
representations from the Chinese community and to the fact
that a very large section of the European population is
compelled, owing to lack of alternative accommodation, to
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