PUBLIC RECORD OFFICE
Reference:
། ། ། །
C.O. 882
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ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
PUBLIC RECORD OFFICE, LONDON
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2. The next class of land to be dealt with is cinnamon and coffee-land (cultivated). This is exempt by law from all direct taxation-in common with all land other than paddy-land--- in the Kandyan provinces (Procl. 1818), and specially in the maritime provinces (Procl. Sir E. Barnes, 1824).
Here there is the choice of continuing indi- rect taxation, or substituting wholly or in part direct taxation.
The consumption in this case being almost entirely out of the colony, and the nature of the trade being such as not to admit of smuggling, the produce is easily intercepted and taxed at the places of export. Also the, administrative difficulty and expense of direct taxation would probably be not great in this case, as cinnamon and coffee-lands are usually held by Europeans The uncer- in large and well-defined masses. tain pressure of an export duty on labour and capital, to no appreciably greater degree (where the inland carriage is tolerably uniform) than a land-tax varying with gross produce, should incline us to prefer the former method of taxa- tion in the present case, as less expensive to Government, and leas inquisitorial to the culti- vator, supposing this to be the alternative. But the same circumstance should be conclusive in favour of the direct method of taxation, if the amount can be made positive, fixed, and known, for a term of years, without any great sacrifice of revenue; of this, however, there are great doubts.
The movement in coffee-planting is of recent origin; it is not yet fully developed. There are numerous estates in every stage of clearance, cultivation, maturity, and productiveness. The supply of labour is irregular, and the progress of the plantations consequently uncertain. For- ther, coffee cultivation is understood to exhaust the soil, like pepper, and to involve the neces sity of entire change of site and long intervals of fallow after a term of years. This result is
as yet entirely undeveloped in Ceylon; it in in ita nature experimental for every diferent acre,
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and incapable of being properly appreciated in prospectu. All these circumstances would seem to make it probable that the planters will be unwilling to pledge themselves for any long term of years to the payment of a fixed land- tax, whether stationary or progressive, but known in amount, even should it be calculated on so moderate a basis as the estimated product of the export duty of 24 per cent. during the same period. The land-tax cannot be scono. mical or satisfactory to either party, unless assessed at very long intervals, which we may not be able to do at a rate convenient to the planter, without a considerable sacrifice on the part of Government.
As cinnamon and coffee lands are at present exempt from land-tax by law, in the event of that form of taxation being resolved upon, a new law must be enacted, and as the first part
of it, the amount of taxation so enacted must
be fixed. What is this to be? and how is it to
be rated! On the produce? or the rent? or by the acre! The last is the plan of the report, and it might perhaps be adopted in this case with some advantage; the assumption of course being, that the coffee and cinnamon-lands at present cultivated do not vary much in pro- ductiveness. If they do, the uniform rate by the acre would not be popular or just. The rate, though adjusted on an average to the acre, might still be calculated on a proportion
of the rent, which, one would imagine, should not be less than 10 or 15 per cent., if the alter- native be the encouragement of coffee and cinnamon, to the prejudice of rice. But as to the form of the tax,' as to the question whether
it should be direct, or indirect, an heretofore, nothing should be done without consulting the parties interested.
As it is in contemplation to reduce the cin- namon duty immediately, it is a question whe- ther it should be reduced lower than what would
be an equivalent for the rent-charge fairly assessable on cinnamon land. This rent-chatge ought to be fixed in the first place, and