PUBLIC RECORD OFFICE
Reference:
C.O. 882
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
4 PUBLIC RECORD OFFICE, LONDON
34
favour, both amongst the native head men and Government officials. It seems to them to be the only way of abolishing the farming system. Now, a forced commutation is The mode of assessment is not on the land, neither more or less than an assessed tax.
Mark this. The assessor but on the estimated return of the quantity of grain sown. sees a field for assessment, and he assesses it according to the quantity of grain required to sow it. If the land is poor a smaller quantity, and if rich a larger quantity will be sown. Hence the measures in use, though they are popularly applied to the land, are in fact only measures of quantity. It follows that all existing assessments for paddy tax It is no land tax, but an are based not on the area of the land, but on the grain sown. assessed tax; and I do not see why such a tax should not be imposed on agriculture in The vital objection of the paddy grower general instead of being levied only on food. to commutation is that the seasons are so uncertain that he may be unable to sow, or may sow and never reap. The tax in kind fails also in these cases; but the commutation must be paid, and is ruinous to such poor people as the puddy growers almost all are. Now, to meet this the commutation ought, of course, to be so light as to minimise the loss in the case of the failure of the crop, and to afford full relief in the average. The practical objection raised against commutation by Government officials is that whereas in the present state of things the tax farmer will give the Government double the nominal value of the tax, and as in a re-arrangement the Government could only commute on the nominal value of the tax, the revenue would seriously suffer. You can imagine the oppression and wrong-doing that exists in the gathering in of the tax by the tax-farmer when in the competition among the collectors, double the nominal value of the tax is given for the privilege of gathering it in! To my mind, the man who should bid at a Government sale anything more than the possible value of the article offered for sale, ought to be committed on the spot. He advertises himself as intending to swindle the cultivator, and yet the Government knocks down the lot to him, and virtually tells him to help himself at the cost of the grower of the crop that is taxed."
Mr. H. Atkinson, of Colombo, furnishes a large amount of inforination on the subject, from which I make the following extracts :-
"In the Central Province, commutation for a fixed annual payment is universal, but amongst the low Cinghalese it is not popular, and in some districts it has been abandoned after a five years' trial. With a bad harvest, or two successive bad harvests, there is of course difficulty in taking a fixed demand, and lands are consequently frequently put in Buit for the recovery of the tax.
"The collection of an impost duty is not attended with the oppression and injustice inseparable from the system of farming the paddy tax, nor with its hardships, as under commutation, and it may, perhaps, be as well therefore to postpone consideration of it for a short time.
'Hardly any one denies the great evils of the system of renting the tax on paddy and fine grain, and the defence offered consists chiefly of practical objections to a change being made.
"It may be interesting here to mention what are the interests that are opposed to any interference with the grain taxes. The native cultivators have always been accustomed to tyranny, and like other natives are probably incapable of forming their minds into an attitude of criticism towards any act of the Government. It is the interest of a large proportion of the planters which is concerned in maintaining the revenue at its present level, and the Observer, which is the strenuous supporter of their interests, accordingly opposes the removal of these taxes.'
19
If it is thought desirable to indicate some alternative source of revenue, I would suggest that more might be obtained by taxing the luxuries and vices of the people. The taste for intoxicating liquors appears to be no more natural to the Cinghalese than it is in children, but of late years they have unfortunately been acquiring it in increasing degrees. The sale of the arrack farms (that is the privilege of retailing arrack at a price fixed by Government) yielded in 1871–2 169,500l., and in 1876–7 254,700., and this notwithstanding the exertions made by Sir William Gregory to discourage it by I believe that this country is a particularly suitable numerous suppressions of taverns.
one for trying the experiment of a Permissive Bill, and if you take an interest in the subject, I would commend this suggestion to your best consideration. The village councils, which have now been revived in many districts, would furnish a convenient means for ascertaining the wishes of the people in a matter so directly concerning their well-being. Under the present system there is at least in one respect an objectionable tendency towards making a sober people intemperate, and that is because the regulation of the liquor traffic and the licensing of taverns is in the hands, not of the judges, who are acquainted with it as the most fruitful source of crime, but of the Government agent
35
of each province, whose position tempts him for the sake of revenue to encourage, or not to suppress it. Considering the traffic, however, merely as a source of revenue, I think that much more might be made of it, and the experiment ought to be tried of raising the fixed price considerably beyond the limits (about 48. 8d. or 6s. 5d.) per gallon. Addi- tional precautions against adulteration, which is already common, would be needed."
"Some revenue might also be derived from a tax on tobacco. It is an article of common use in Ceylon, and there is a considerable export of it from the northern pro- What the total vince. It is computed that 19,000 acres are under this cultivation. produce may be is not known; but the exports in 1873 were, cwts. 37,000, valued at 99,000/."
Then there is the proposal of a land tax, which is of course unpopular with all parties, except, perhaps, the paddy cultivator, whose wishes are not much considered, but who would probably be glad of any change in the incidence of taxation. One great objection to it is that a survey of lands would be required, and would occupy a great length of time."
"As to the objection that the majority of the people cannot be reached by any other means than that of a tax on food, so far as it is true it appears to me as an argument against such a tax. If the natives can procure nothing but the bare necessary food, to enhance its cost by so heavy an impost as one-tenth must diminish the quantity they can afford to eat. This condition is true of large numbers of the rural Cinghalese. Many of these people are so poor that even a dish of rice and a chili (a pepper pod) is some- what of a luxury, and they are compelled to exist partly on cholum, or some miserable kind of fine grain. Yet even these crops are subject to the same demands from Govern- ment. The assertion that no other taxes are paid by natives, however, breaks down when the revenue returns are examined."
"I think that the worst fault of the impost, apart from the method of collection, is that it is so heavy upon the very poor classes, who are barely able to get a living at all. The prosperity of Ceylon is confined to the centres of trade, and to certain districts where agriculture is successful. El-ewhere there is extreme poverty, there are people who suffer from terrible diseases because they cannot get sufficient food, and there are others in a state of barbarism."
"The last argument is that which is said to have been invented by a Commission on the question some years ago. That it is for the good of the people to tax (that is, take) their food, and apply the proceeds in reproductive enterprises. The public accounts are so kept that the cost of these enterprises cannot be ascertained by outsiders; but it is certain that some of the more ambitious ones have been failures. I do not speak of roads, but this is true of some irrigation works, and the most successful are now found to be the repairs of small tanks done by the villagers themselves, the Government supplying the sluice. Any other undertakings ought to be provided for out of surplus capital, and not from men's daily bread. If there is any weight in the considerations I have urged, such an argument cannot support the continuance of a tax which is obtained by a barbarous and demoralising method of collection, and which strikes directly at the life of distressed classes of people."
The whole case against these taxes on the food of the poor is put very forcibly in the following speech made by Mr. George Wall, at a meeting of the Planters' Association of Ceylon, at Kandy:--
Mr. Wall proposed the following motion on this subject:
"That taxes on the staple food of the people are impolitic, and tend seriously to discourage agriculture in Ceylon. That the farming of the paddy tax gives rise to great injustice and oppression, and ought to be abolished. That other means should be devised whereby the revenue now levied on paddy and rice might be raised on more politic and equitable principles."
Mr. Wall said, in supporting the motion, that the subject of the grain taxes had been very frequently discussed, not perhaps in this Association, but publicly by Government and by private individuals. The present raising of the question had been brought about by Government appointing a Commission to inquire, amongst other things, into these matters: 1, whether the grain taxes should be removed; 2, whether the farming of these taxes leads to demoralisation; and 3, whether a land or other tax should be substituted. Although the question, as he had said, had been discussed on many previous occasions, the present occasion was one particularly promising and favourable, because the question had been raised at this time by the Government, who, from the terms of the letter of instructions to the Commissioners, seems to be ready to make some amendment in the law as it at present existed. The fact of the Commission having been appointed, brought to the planters as a body and to the Planters' Association as their mouth-piece and E 2