90
reside in hotels.
The cost of living for all classes of the
community remains extremely high, but for the very considerable
section which is compelled to live in hotels, even the
absolute minimum costs represent a great strain on their
finances. Moreover, the special allowances designed to
assist employees in meeting the abnormally high cost of
living are included in the taxable income. It was, therefore,
considered only reasonable that these factors should be taken
into consideration in determining the rates of personal
allowances.
16.
"
In these circumstances, the committee recommended
that the personal allowance should be increased to $7,000
while that for a wife should be increased to $5,000. In
recommending these increases the committee felt that they
were also meeting, to a large extent, the representations
which had been received from the Chinese community in regard
to the inclusion of a dependant's allowance. Such an allowance
is usual elsewhere but under local conditions its inclusion
would present peculiar difficulties in view of the obligation
imposed by Chinese law and tradition for the maintenance of
dependants in addition to children. In fact, it is not an
exaggeration to say that, if a dependant's allowance were
provided for, the chances of collecting any tax at all from
large numbers of the Chinese community would be very slender
indeed. There is a good deal of feeling on this point but I
have taken the line that, as the standard rate of tax is very
moderate and as the personal allowances have been fixed at an
artificially high level, dictated by local housing conditions,
no real hardship will result if no specific relief is given. in
respect of dependants other than children.
17.
The question of children's allowances is also a
matter concerning which there has been much public criticism.
It was originally proposed that these allowances should be
limited to $2,000 each for the first and second child and
$1,000 each for the third and fourth child. In view of the