PUBLIC RECORD OFFICE
Reference:
C.O. 882
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4 PUBLIC RECORD OFFICE, LONDON
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heard a word against the impost as a food tax. Every day, however, I hear complaints of the way in which it is exacted (Mr. Wilson: Hear, hear.) I think it might be reduced in certain localities where the crops fail, or where they suffer from the depre. dations of wild animals; in this way the people ask for relief. Now, as regards the second objection, viz., that it is unequal in its pressure, especially in view of the import duty of 7d. on a bushel of rice. In order to understand the question of "unequal pressure" we must in the first instance ascertain the number of people who own paddy lands, and those who do not own such, but are compelled to go into the market and purchase imported rice. So far as I have been able to judge from observation, and to ascertain from statistics and the people, besides using my knowledge in this respect derived from an examination of commutation registers-I may be wrong, but this is my conviction —that the number who own paddy fields are about 40 out of every 100, whilst those who own gardens of some sort or other are about 80 out of every 100. A tax of one tenth is paid upon the paddy fields, and a tax of 7d. a bushel is paid at the customs for rice imported by those who have gardens but who do not possess paddy fields. The former equals one tenth, and the latter one fifth of the revenue of the island. Thus the paddy tax yields only half of the customs duties. The paddy cultivators likewise are in the proportion of half to one. If we take into consideration the paddy cultivators who also buy rice, and place them side by side with the Malabars and other strangers who sojourn but for a time, the pressure upon different classes cannot indeed be very disproportionate. It is also held to be unfair because English planters and Sinhalese planters in the interior I admit that the tax is not paid by coffee planters. Not a penny do not pay any tax. goes out of their pockets. But we must not forget that the tax is paid by a floating population of landless Chetties and Malabars, and by Tamil coolies on account of the planting interests, and who but for those planters would not be here. So that, whilst the amount does not go out of the planters' pockets-certainly a great encouragement to the planting interest, upon which all other interests chiefly depend-it does come out of the coolies' wages, and it is decidedly not a greater burden than the burdens they have in their own country, and on account of which they come to Ceylon. Three tenths of the revenue of the island is raised from food taxes, one tenth of it from the paddy cultivator, and two tenths from imported rice. According to my view, therefore, there is an equal distribution of the tax, which cannot fall very unevenly upon any class. A great authority in commenting on Sir Emerson Tennent's scheme for a general land tax properly states :-
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The leading idea of the proposed land tax, however imperfectly realised, is the expediency of equalizing burdens as far as possible. This is no doubt a sound and just rule, but there is another rule, less kept in view but equally important, and that is, to raise your taxes with as little alteration of law and violence to usage as possible.”
I think not.
But whilst I say all this I am not going to argue for the retention of these food taxes; if this Council thinks they are odious, by all means let them be abandoned. But all Í care for is, that, in consequence of changes effected in the taxation of the country by reason of what English politicians or political economists advance, the situation of my countrymen may not be rendered more irksome than it is now, especially, as I have remarked, as the people appreciate the justice and force of having to contribute towards the support of Government, and do not clamour that they be altogether relieved of these particular taxes, although they ask, and I ask for them, that the tax be graduated and modified, and provided for as in the extracts which I have read from ancient authorities. Supposing, however, these taxes on imported rice and homegrown paddy are particularly obnoxious in themselves, seeing that they amount to three tenths of the revenue, the question is, Will this Council or the Government sanction their abolition without providing a substitute for the loss that would accrue to the revenue? This question I may almost take it for granted, especially judging from what fell from the hon. and learned Queen's Advocate when he pointed out that a saving from the ecclesiastical votes would not lead to a reduction of a penny of existing taxation- certainly a questionable proposition. This question of a substitute was considered by Sir Emerson Tennent, when he was called upon in 1846 to draw up a report on the finances of the Colony, and a very elaborate report was the result. He recommended what has been since referred to by the Queen's Advocate, in introducing the Registration of Titles Bill, when the hon. and learned gentleman said that the cadastral survey might lead to a land tax in lieu of a food tax. It has also been promulgated by a gentleman not 100 miles from this chamber-though he is not a member of this Council-one who takes very great interest in the welfare of the Sinhalese and their improvement in every respect, and who has gone fully into this question from an English” stand-point.
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He thinks a general land tax, modified according to circumstances, is the thing for Ceylon. I have given the subject due consideration, have read all that was urged by Sir Emerson Tennent, and have considered all that has been put forward by the gentle- man I have alluded to, who sympathises so much with the natives, and I must say that I am not prepared to agree with any of them that a land tax is suited for Ceylon. I will state in limine my objections to a land tax. It is not acceptable. Those gentlemen who advocate a land tax, in their sympathy for the poor, forget that this is a land in which there are no coal, copper, lead, and iron mines, no minerals in the bowels of the earth on which an appreciable tax may be levied. If this were otherwise I could under- stand the cogency of the argument for the proposed change. As it is, if a land tax were introduced, every man who now pays 2s. would have to pay 4s. According to my calculations it would mean ruin. Every man who had a paddy field has also two or three gardens, chenas, owitas, jungles, &c. If you take the tax from the paddy field you must also take it from these other lands. Otherwise greater hardship would ensue. The paddy field owner has chena land, has reserved forests, whence he cuts timber for his fences and grass lands. I think, Sir, I have not forcibly enough put this part of the case. It is amusing to me to observe, that those who object to food taxes and desire to A land tax put on a land tax as a substitute, only aggravate the evil of food taxes. will undoubtedly be a food tax, plus a food tax, being upon both the curry and rice of the people. Another objection to the land tax is that it will be a direct tax. Though three fourths of the people pay customs dues on their rice it is not felt, because I must not forget that the land tax would have the effect of exempting a large itinerant popu- lation from paying any tax. The Hon. the Government Agent of the Central Province knows how difficult it is to collect the road and other taxes from such people, who are here to-day and gone to-morrow. Sometimes they may remain for two months, but taxes are hard to levy from them. Again I do not think it would be good policy to put a burden on the coffee planters, who have done so much for the country, and upon whose success depends the prosperity of Ceylon. Further, I do not believe that if the customs duty were removed the rice would be sold one penny a bushel cheaper. We must, too, bear in mind that a land tax would be a novel tax, and innovation, as was proved in 1797, is not appreciated in the East. Here I may refer to a passage in the report of the financier on Sir Emerson Tennent's Report. It runs thus:-
"The distinction which must be here laid down, though not entirely neglected, is not clearly stated with a general assurance that its plan of taxation will be welcomed by the natives, as very little an innovation and much of an advantage to them; by the Europeans as a wise and intelligible measure of finance, and as an agreeable substitute for the more vexatious system of export duties. There are many good reasons for holding the precise contrary. The report neither rightly estimates the force of usage in Ceylon, nor the extent of innovation it proposes to introduce. Usage must be held to have more of the force of law in an Asiatic than in a European country, and in matters of taxation more under a despotic than a representative government."
Since this motion has been on the order of the day I have asked, in the interior, whether the people were wishful for a land tax, and the reply was, "Good heavens! Never think "of a land tax.
We will rather bear the present tax with all its inconvenience and injustice than accept a land tax." I am an old man, and may not live long, or suffi- ciently long, to see the results of the proposed innovation, but I deliberately say that it is my opinion that if a land tax be imposed the consequences will be similar to what they were in 1797. And in all sober seriousness I think, Sir, that you will not recover the tax except at the point of the bayonet. I submit that the proposed minimum tax of 1s. per acre by Sir Emerson Tennent is so enormous that for the worst lands and the simplest forms of occupation it must amount to a prohibition to improvement. If a cadastral survey is to take place it cannot be done in less than half a century. The minute subdivision of property and frequent changes in occupation render the tax vexatious and unnecessary. The question was considered in 1842, when it was stated
"These reasons seemed to the Colombo Committee of the House in 1842 insuperable obstacles to enforcing a land tax on every individual, garden, plantation, field, and farm."
A further objection to a land tax is that it will contravene the treaty regulation of 1818, clause 18, which is as follows :—
"The general assessment of tax on the entire paddy lands of the Kandyan Provinces is fixed at one tenth of the annual produce, to be delivered by the proprietor or cultivator at such convenient store house in every province or subdivision of a province as shall be
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