PUBLIC RECORD OFFICE
Reference:
C.O. 882
| ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH—NOT TO
PUBLIC RECORD OFFICE, LONDON
Bemission of
grain taxes advimble.
42
several months to elapse between the issue of these questions and the next meeting of the Commission, in order that ample time might be given to all who desired to express any opinion on the subject; and as each paper of answers was sent in, it was at once forwarded to each member of the Commission in order that he might be able to give the answers full consideration and form his opinion generally on the subject before the Commission met for their final deliberations.
The replies which have been received and the failure of many to reply, show that the present system of taxation is generally acceptable to the native community, and, as far as their wishes go, calls for no change.
Having briefly stated the general result of the evidence on the main point of our inquiry, we will proceed to report seriatim on the several points to which our attention has been directed.
I. In view of the circumstances of the country we are of opinion that it is not advisable to remit the grain taxes in such manner as materially to affect the revenue. For many years to come no reduction of taxation will be possible. The revenues of the Colony raised by taxation are not sufficient to meet the ordinary expenditure, and but for extra ordinary sources of revenue, such as railway profits and land sales, all progress would be impossible. There would be no money for those productive works on which the development of the country depends, of which the most important are irrigation for the improvement and extension of paddy cultivation, roads and railroads for the conveyance of manure and produce, and the interchange of commodities, harbour works, &c. The following statements show how far the ordinary revenue goes to meet the ordinary expenditure, and how the extraordinary or reproductive expenditure of the Colony is provided for :-
Establishments
Pensions
-
Charitable allowances
Education -
43
ACTUAL EXPENDITURE for 1876.
Heads of Expenditure.
Ordinary and
Extraordinary,
Total.
Deosmary.
3
£
851,186
*38,307
£ 389,443
48,085
48,085
Revenue services
26,088
26,083
Administration of justice
7,879.
7,879
Ecclesiastical
281
281
3,850
3,860
16,533
16,583
Hospitals
-
28,814
28,814
Police and gaola
88,060
88,000
Rent
-
8,210
8,210
Transport
23,011
98,011
Conveyance of mails
10,075
10,075
Public works
187,687
146,080
278,647
ACTUAL REVENUE for 1876.
Miscellaneous
82,648
†6,288
88,896
Heads of Revenna.
Taxation.
Non-taxation.
Total.
Interest
191
1,180
1,871
Arrears of revenue
Customs
£ 86,006
£
£
Government vessels
18,187
18,137
36,008
Military contribution
116,250
116,950
282,147
289,147
Colonial store
66,182
8,000
64,912
Port and harbour dues
10,489
10,489
Refund of duties
2,018
Land sales
-
81,547
81,547
•
Lands taken for Government purposes
885
1,018
835
Rand revenue
88,799
88,799
Immigration
9,174
9,114
Renta, exclusive of land
88,282
2,899
40,681
Railway services
Stampe
121,180
121,180
Railway construction
125,967
61,844
196,987 -
51,844
Taxes
8,728
8,728
Postage
1,809
1,809
Total
885,297
391,638
1,276,980
Licenses
204,278
204,278
Fines and forfeitures
8,263
Sale of Government property*
78,577
78,608
Reimbursements
8,817
28,409
8,268
147,085
82,296
MiscellaneoULE
29,800
22,800
Interest
18,048
13,048
Government vessels
4,199
6,129
Railway construction
Special receipts
689
689,
Crown agents
2,878
2,578
Railway receipta
$79,670
$79,670
Total
871,816
804,072
1,876,887
• Under this hood, le entered the amount realized by tha mẫn of salt. Against it should be net 7,0887., being the cost of facture which does not properly form part of the tax on salt.
£
148,060
8,000
51,844
235
18,489
Unexpanded balances on public works reserved for ex-
penditure againat the sev
she-of 1876
·
87,427
Surplus balance
-
*
11,590
Total
-
#810,186
F 2
• Railway rainblish
† Includes 8,7141, sost of surveys.
These statements show that the revenue dezived from taxation in 1876 (deducting the cost of manufacture of salt) was 864,790%, while the ordinary and possesty expenditure (deducting cost of manufacture of salt) smownted to 678,268k, showing an excem of ordinary expenditure over the amount raised by taxation of 18,482). After deducting all cross entries the extraordinary axpenditure is shown to have been as follawn -----
New public works
Government vessels (less receipts)
Lands taken for Govemment pasposes
Excess of nosessary expenditure over taxation
Page 360Page 361
PUBLIC RECORD OFFICE
Reference:→
C.O. 882
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
Taxes on
home-grown grain.
Bystem of
maritime
provinces.
44
It was met from the following sources not derived from taxation :—
Sale of Government property (such as timber,
Land sales
Leas cost of survey
Interest
Profits of railway
stores, &c.)
Less cost of stores
Reimbursements
Miscellaneous receipts
3
Special receipts and Crown agents
Rent of Government buildings
Total
-
£
£
81,547 5,714
75,833 13,048
114,226
73,508
8,030
65,478
23,409
21,731
3,062 2,399
£319,186
Of these sources of revenue the most important are land sales, railway profits, and timber. The revenue from land sales must necessarily decrease and ultimately come to an end, so must the revenue from timber, unless a large expenditure is incurred in forming new plantations, and the permanence of the railway profits entirely depends on the continued success of the coffee enterprise.
Of the ordinary sources of revenue the grain taxes and import duties on grain yield 290,000l. a year, or one-third of the whole taxation. The taxes on home-grown grain amount to 107,000l., of which 100,000l. is derived from paddy and 7,0001. from fine grains. The taxes on home-grown grain are levied on the authority of immemorial usage, and represent the reserved rent on which land was granted by the Government, or are a commutation for the personal services which the landholders who were not allowed the privilege of paying a rent in kind had to render for their lands to the Governments which preceded us; and they have been levied without trouble or difficulty from the earliest days of British rule in Ceylon It is necessary to draw a distinction here between the maritime and the Kandyan provinces, as the tenures and laws are different, though the origin of the grain tax or reserved rent is the same in both cases. The maritime provinces were taken from the Dutch in 1795-6, and they were ceded to us by the Treaty of Amiens in 1802. In 1815 the Kandyan provinces were brought under British rule by a convention with the Kandyan chiefs and people.
By the proclamations of 3rd May 1800 and 3rd September 1801, the Governor' taxation in the anxious to "enable every man to enjoy with security the fruits of his industry," declared that "all land within these settlements (ie. the maritime provinces) now held in un- "divided tenure by more than one proprietor, shall pay to Government the tax of one "fifth part of the produce until the same be divided among the said proprietors; after "which division the grain tax shall be reduced to one-tenth, excepting when the said "land be subject to the payment of anda or any proportion amounting to or exceeding one- "fourth part, the payment of which shall still continue as heretofore; or, where the said "land shall be held on tenure of service;" and grants of uncultivated lands were made " in full and perpetual property," on condition of bringing the land into cultivation within five years and "on the terms of paying annually to Government the fourth part "of the produce of the low grounds and the tenth of that of the high grounds." It was further declared that all obligation to service on tenure of lands throughout these settle- ments shall cease, and lands held duty free at this present time on account of such service shall pay to Government one-tenth of their produce of high lands and one-fifth part of their produce of low lands excepting only such lands as were formerly malapala, nclapala, ratninda, or anda, which will continue to pay one-fourth of their produce to Government. By the proclamation of 22nd April 1803, it was ordained that in all cases, where no share of the produce had been reserved to Government by any specific grant or title or by any legislative enactment, the share to be reserved for Government should be fixed at one-fifth part of the produce of all low lands, and at one-tenth part of the produce of all other lands excepting such gardens as do not contain the number of "ten fruit-bearing trees which shall remain free of all direct contribution to Govern- "ment."
Tax on
gardens.
n
The rights of the Crown to a certain share of the produce of all land was here re- cognised and fixed, but the collection of a tax on gardens and small plots was found to be so objectionable, and attended with such an amount of resistance, evasion, and extortion,
45
that it became necessary, in 1824, to exempt coffee, cotton, and pepper, and practically the rights of the Crown to a share of the produce of paddy fields and to a share of the fine and dry grain grown on high lands only were retained, and the right to a share of the produce of cocoanut and other plantations was tacitly abandoned, In 1797 a special tax on cocoanut trees was imposed, which had to be at once abandoned. It is owing to the variety of tenures referred to in the proclamations quoted above, that there still exist in the maritime provinces the rates of one-half, one-third, and one-fourth. They represent the measure of relief granted in former days to those who held on oppressive tenures, and to assimilate the tenures of land, the Government, in 1813, provided that all Letter to who were liable to pay a higher rate than one-tenth, might redeem by instalments such even Com portions of the rents as exceeded one-tenth of the produce, a measure which Sir William Deputy Secre Colebrooke reported in 1831 to have been attended with good effect. We would recom- try to Govern- mend that measures be taken to encourage landowners holding at the high rates to take 24th Novem- advantage of this provision, which appears of late years to have been generally over- looked.
missioner from
ment, dated
ber 1818.
ation in the
In the Kandyan country the rule is more simple. By the proclamation of 2nd March System of tax- 1815, the Royal dues and revenues of the Kandyan provinces were retained according to Kandyan lawful custom, and after the rebellion of 1817 the Government placed the taxation of provinces. those provinces on its present footing. By the proclamation of the 21st November 1818, all taxes were abolished except a general tax on paddy lands which was "fixed at "one-tenth of the annual produce to be delivered by the proprietor or cultivator at such "convenient store-house in every province" as shall be appointed. To mark the just sense which the Government had of the loyalty and good conduct of the chiefs and people of certain districts, the rate was reduced in those districts from one-tenth to one- fourteenth; but that it might be "known that persons who are leaders in revolt or disobedience shall meet punishment," it was proclaimed that all lands "declared forfeited by the misconduct of the proprietors shall, if by the mercy of Government restored to "the former owners, pay a tax of one-fifth of the annual produce." In the Kandyan country fine grain was not liable to tax.
The import duties on grain yield about 180,000l. a year, which is equivalent to upwards Import duties of one-fifth of the ordinary revenue raised from taxation. It is at the rate of 7d. a bushel on grain. on rice which is about ten per cent. on rice at the ordinary market rate at the port of Colombo, of 6s. 6d. a bushel. It is, therefore, in no sense a protective duty, being only equivalent to the one-tenth which the native cultivator pays on home-grown grain. It falls chiefly on the immigrant and floating population, and, excepting the small amount they pay for salt, is the only tax which they pay for the protection they receive. It also falls on the natives in towns, who likewise pay no other taxes except those special to the towns in which they live. It should be observed that the labouring population of the coffee districts consists almost exclusively of immigrants from India, a large pro- portion of whom return annually to their native country, carrying with them considerable savings earned Ceylon. This portion of the population is free from the road tax, which is levied upon the resident population, and, but for the import duty on rice, would be practically exempt from taxation of any kind. These import duties are collected easily and cheaply, without oppression and without fraud. Owing to the heavy cost of carriage, the import duty of 7d. a bushel forms a very small part of the cost of rice over and above the Colombo price by the time it reaches the interior. In the coffee districts Importance of rice frequently reaches double or even treble the Colombo price, owing to the expense Irrigation. and difficulties of transport, and interruptions in the communications. The policy we would recommend is, not to remit or reduce taxation, but to make rice cheaper by extending and improving the communication by road and railway throughout the whole interior of the island, and by restoring and improving irrigation works with a view to increasing the local production of grain. The success of the irrigation works in the Eastern Province shows that this is the true policy. The restoration of those works was commenced 20 years ago by Sir H. Ward, and continued by Sir H. Robinson, and it is the only part of the island where sufficient time has elapsed to render it possible to judge of the results. Thousand of acres, of which 25,000 are in one block, have now been converted from forest and jungle into productive paddy fields, the owners of which are able to send large quantities of surplus grain to Jaffna and Badulla and other parts of the island. There is every reason to anticipate similar results from following the same policy in other parts of the island, and in order that the Government may be able to do more and not less than it has hitherto done in this direction, we should wish to see the revenues increased and not diminished.
was
roads and
II. The substitution of a general land tax for the present grain taxes is a measure Proposal to which has much to commend it to the most patient consideration of the Government, ambstitute
F 3
general land