PUBLIC RECORD OFFICE
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C.O. 882
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4PUBLIC RECORD OFFICE, LONDON
Cadastral Kurvey required.
Effect of Can- toms duties on grain.
Present system of taxation on home-grown
acceptable to the people.
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he pays a tax or rent for his paddy field only, he holds his garden lands free and, as we have already shown, the import duties reach the immigrant population which would otherwise escape taxation altogether.
In fact it is for them and the dwellers in the large towns that rice is imported. The rural population as a rule grows its own food. Notwithstanding the theoretical objections to these taxes, we find that on the whole the incidence of taxation is fair, inoppressive, and generally acceptable. We therefore are not prepared to recommend the substitution of a general land tax the introduction of which, as we have already stated, would be met with many difficulties, and would be highly distasteful to all classes of the native inhabitants of the Island, who would regard it as an impost on their gardens and plantations, in addition to an impost on their fields; or to use the language of the Sinhalese member of the Legislative Council, during a debate on this subject, as" a tax on their curry as well as their rice." They would not look upon it in the light of a compensation for a proportionate reduction of the tax on their paddy. As a practical objection to entertain- ing the proposal at present, we may add that a detailed survey is a necessary preliminary to the imposition of a land tax, and we are informed that the Surveyor General estimates the time required with his present staff to complete a survey of the private lands in the colony at 80 years, but with 120 additional surveyors, he could complete the work in It might perhaps be desirable to seven years at a cost of upwards of 42,000l. a year. remove this obstacle by carrying out a complete cadastral survey of the private lands in the colony which, if not required hereafter for the purpose of a land tax, would in any case be of great value for the registration of titles, the prevention of litigation, and the protection of the Crown lands from encroachment.
III. We have already shown that the import duty on rice bears a comparatively small proportion to the cost of transport to the interior, and we are of opinion that the Customs duties on grain do not affect consumption in any material degree.
IV. We reply in the words of the fourth question which has been put to us, that the tax on paddy is conformable with ancient usage and acquiesced in generally by the grain generally people. We are prepared to go further, and to state that the native cultivator in the East universally recognises the right of the Government to a share in the produce of their fields. Moreover, in point of fact, a large extent of paddy land now held by natives as private property was within the present century the absolute property of the Crown, and was in course of time granted or sold subject to a reservation of a share of the produce.
Objections to the renting system.
Proposat to introduce a wystem of compulsory
commutation.
V. We now come to the consideration of the most important question with which we have to deal, namely, the mode of the collection of the taxes on home-grown grain. Though the people willingly pay to the Government a share of their produce, they do not willingly submit to the system under which the Government sells to a middleman the right to collect the Government share. Notwithstanding every precaution and the care with which the law has been framed to prevent abuse, and, while securing the due collec- tion of the revenue, to give all possible protection to the cultivator, the evidence before us compels us to the conclusion that the present mode of collecting the tithe on home- grown grain by the renting system is susceptible of abuse, and has been abused to the disadvantage of the cultivator, We are therefore of opinion that it ought to be superseded by some other system. Moreover, the payment in kind of any share of the produce of land necessarily involves restrictions and delays which are calculated. to interfere with the proper harvesting of the crops, and to expose them to risk and damage. The cultivator, if he is to obtain the full reward of his labour, must be left free to reap and thresh when he pleases; on his discretion in these matters there should be no restriction. We recommend, in order that the renting system may be abolished in the case of paddy lands, that a law should be passed laying down the mode in which the money value of the Government tithe on paddy should be assessed and making the money value of the tithe so assessed payable as an annual commutation in lieu of the payment of the tithe in kind. The commutation should be made on a careful field-to-field assessment and should be based on the average annual crop which the land is capable of yielding, regard being had to its soil, water supply, facilities for obtaining manure, its liability to any special damage, and all circumstances which affect its culti- vation beneficially or otherwise. The Government share of the average annual yield after deduction of the seed paddy should be valued at the market rate of paddy for the district on an average of 20 years. The first compulsory assessment should be subjected to revision at the expiration of seven years. It would, in our opinion, be necessary to exempt from compulsory commutation any fields which from want of water or other natural cause
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had not been cultivated for the last seven years, and power should be given to the revenue officers to fix the assessment for such fields from time to time when cultivated. In the satne way power should be given to fix from time to time the assessment on paddy grown We are of opinion that if proper care on owiti and hen and elsewhere than on wet land.
be exercised in making the assessment, and due precautions be taken against under- estimation of the extent of the fields, not only will there be no material loss to the revenue, but the commutation may be carried out on terms which will be acceptable to, and recognised as just by, the people.
A majority of the Commission is of opinion that fine grain which is not taxed in the Kandyan Provinces should be exempted from tax throughout the Island, and in support of their view they point to the small amount of revenue derived from this source. They also support their view by the statement of the Government agent of the Northern Province that commutation of the fine grain tax is not practicable. It appears to a minority of the Commission that it is not desirable to abandon any of the Crown rights over the land, and that this tax should not be given up unless a substitute for it can be found. The greater part of it is paid by the cultivators of the Northern Province, and forms a considerable part of its revenue. This province even now does not pay the whole of the cost of its administration, and therefore the minority think that it is not expedient still further to increase the deficit; and they also consider that if this tax were now abolished its abolition would materially increase the difficulties in imposing a land tax, if such a measure were hereafter adopted.
C
The Government agent of the Northern Province writes:"It is utterly impossible "to introduce a system of commutation with regard to this tax [he excepts the tax on varagu] as the lands sown for one crop are not in many instances sown for another crop "of dry grain for some time." This is the only reason he assigns for not adopting a system of commutation. In Madras no difficulty is found in assessing every kind of land, both wet and dry, and the minority of the Commission are of opinion that with the admirable records which are kept in the Northern Province of all rent sales and of all transactions affecting land, it would be possible, by taking a sufficiently long average of years, and by liberal principles of assessment, to arrive at a rate which would be fair, and without any material sacrifice of revenue enable the Government to impose a compulsory commutation and to abolish entirely the renting system, and thus relieve the Jaffna cultivators of the hardships which that demoralising system now entails on them.
farmers of
VI.-Lastly, we have failed to devise any means, otherwise than by compulsory com- Landowners se mutation, by which landowners may become farmers of their own tithe, and in considera- their own tion of the fact that commutation has not hitherto been universally in favour amongst the tithe. paddy growers, we recommend that the commutation should in the first instance be made at the most liberal rate compatible with the maintenance of the revenue.
maintain the
revenue:
We have already expressed our concurrence in the view that it is necessary to Neomary to maintain the revenue so as to carry on the administration and material improvement of the Island, and we also fully recognise the necessity of providing for the interest on loans which have been raised or may soon have to be raised for the more rapid development of the resources of the colony.
no check on
of the reveoNG.
We have also been reminded that in any changes we might suggest no check should And to impose
We would point out that this the progress be imposed on the progress and elasticity of the revenue. very necessary and desirable condition precludes the possibility of adopting a land tax and elasticity fixed in perpetuity, and if a land tax were adopted at all, renders it imperative to make it an assessed land tax subject to revision at certain periods of moderate duration, and we may remark, incidentally, that a land tax on this principle is open to all the objections which are urged in the following extract from the " Wealth of Nations":—
"A land tax assessed according to a general survey and valuation, how equal soever it may be at first, must, in the course of a very moderate period of time, become unequal, To prevent it becoming so, would require the continual and painful attention of Govern- ment to all the variations in the state and produce of every different farm in the country The Government of Prussia, of Bohemia, of Sardinia, and the Duchy of Milan, actually exert an attention of this kind, an attention so unsuitable to the nature of Government that it is not likely to be of long continuance; and which, if continued, will probably, in the long run, cause much more trouble and vexation than it can possibly bring relief to the cultivator.” -Smith's Wealth of Nations, paragraphs 286-7.
In conclusion, we will briefly recapitulate the principal points which we desire to Recapitulation submit for your Excellency's consideration.
of principal
1. Historical inquiry shows that taxation, in some form, of home-grown paddy is of consideration. immemorial usage, and has always been willingly acquiesced in by the people.
points for
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