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of the 30th March, the proposal that the standard rate of Earnings and Profits tax should be raised to 15% gave rise to determined and widespread opposition which was voiced not only in Legislative Council but by public bodies and in the press. In consequence of this development, I sought your authority for the introduction of certain compromise proposals and, when the Budget was finally accepted by Legislative Council, it was made clear by the Financial Secretary that Government intended to increase revenue to at least $204 million, but that the exact manner in which this additional revenue would be produced would receive further consideration.
14. The compromise proposals which you finally approved involved an increase in the standard rate of Earnings and Profits Tax to 121% instead of 15% and the introduction of an annual business registration fee of $300 for all business premises coupled with provision for the compulsory registration of business names, including the names of all partners, together with their aliases. Such a measure had previously been strongly opposed by the Chinese section of the community and it was felt that it would be foolish not to take advantage of the opportun- ity presented by their willingness to accept it on the present occasion. Besides the additional revenue derived from the registration fee, the proposed registration measures will put a stop to the introduction of fictitious partners and other evasive practices. This should in due course be reflected in some increase in the yield from Profits Tax.
15. The necessary legislation for the increase in the standard rate of Earnings and Profits Tax to 121% has now been enacted and a Bill providing for the registration of business names, including the names of all partners together with their aliases, and for the payment by all businesses of an annual registration fee, is in the course of preparation. It is hoped that the new Bill will receive its first reading at an early date. These measures are expected to yield additional revenue to the extent of some $12 million thus bringing the total revenue figure to $204,139,480 and providing for a surplus of $3,300,397.
16.
Speci al
Other charges for 1950/51, excluding Public Works Non- recurrent and Special Expenditure and also cost of living allowances, total $81,655,470 as compared with the figure of $72,357.096 for the year which has just ended. expenditure, excluding Public Works Non-recurrent and works financed from Colonial Development and Welfare Fund grants, totals $9,772,155 as compared with $11,468,520 for the financial year 1949/50.
17.
Points calling for comment in the departmental expendi- ture estimates have been dealt with in detail in the memorandum on the estimates, copies of which are enclosed with this des- patch, but there are certain developments to which I should like to draw your attention.
18.
The temporary departments such as the Custodian of Enemy Property and the Department of Supplies and Distribution will still be necessary during the current year. No further substantial reduction can be expected in the cost of the Custodian's Department until it proves possible to close down the department altogether. It is hoped that during the coming year it will be possible to effect some reduction in the staff of the Department of Supplies and Distribution and to incorpor- ate the remainder of the staff into the Department of Commerce and Industry. With this object in view, the department has been placed under the control of the Director of the Department of
Commerce....