PUBLIC RECORD OFFICE
Reference :--
TELEC.O. 882
5 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO:
p. 62.
18 to 17.)
44
moved a resolution which was unanimously adopted that "In view of the circum- stances of the country it is not desirable to remit the grain taxes in such manner as materially to affect the revenue," and he signed a report which stated "of tithe is borne without complaint by the people, and is generally felt to be neither "the payment oppressive nor unjust."
The net result of the Commission was to retain the grain taxes, but to abolish the renting system, and this result was embodied in Ordinance, No. 11, of 1878.
This Ordinance, which is well explained in the Queen's Advocate's Report, consisted (No. 4, pp. of two parts; the first, which provided the machinery for and laid down the principles of compulsory commutation, was to come into operation on the 1st of May 1879; the second, giving the details of the new system, was to come into operation in each district by proclamation when the necessary preliminary steps had been taken by the Grain Commissioners, who have ever since been busy in carrying out the Ordinance and have not yet finished their work. And here it is important to notice that the Ordinance
was not in force in the Walapane district when the evictions, of which so much has been said, occurred, for, in his Administration Report for 1886, the Assistant Govern- ment Agent for the Nuwara Eliya District (which includes Walapane), stated that the Grain Tax Ordinance had not yet been introduced, whereas the alleged cruelties took place in the years 1882-5.
The Ordinance provided for three kinds of commutation :-
i. Annual commutation, in which a fixed sum is paid annually.
ii. Crop commutation, in which a fixed sum is paid in those years only in which
the land produces a crop.
iii. Grain duty, in which a sum is paid varying with the estimated value of the
crop, in those years only in which the land produces a crop.
This last was to meet the case of dry grain, i.e., hill paddy and taxable produce other than paddy, grown chiefly in the Northern Province, and including the grain grown on the Chenas or forest clearings. In the Kandyan provinces, and therefore in the Nuwara Eliya district, this kind of grain* is not liable to tax, and the whole amount derived from it is insignificant as compared with that derived from paddy. In the 1889 estimates the estimate for the paddy tax is Rs. 908,500, and that for fine grain, which is much the same as dry grain, is Rs. 44,450. Dry grain being cultivated very irregularly and in small patches, and the Government Agent of Jaffna having declared the commutation of the tax to be impracticable, the majority of the 1877 Commission wished to abolish it, pointing out that this kind of grain was already exempted from taxation in the Kandyan provinces. A further Commission was appointed in 1879 to inquire into the matter, and they again recommended its abolition, on the ground that Seas, pap. 22 without the renting system the tax could not be collected. However, the finances of Ceylon were by this time going rapidly downhill, no tax could possibly be abolished, and as far as is known the tax is still being collected as before.
No. 26, p. 61.
(No. 34, p. 25.)
of 1890.
No. 34, p. 12.
Paddy was dealt with by annual and crop commutation; the former, under which the same sum is paid year by year, was intended for the more developed districts, the latter under which a high sum is paid in good years, and nothing at all in bad ones, for the less develope 1 and less irrigated.
In either case, under section 26 of the Ordinance, the settlement is for seven years; and, as an inducement to the people to choose annual commutation, a rebate of 10 per cent. on the tax is given under that system to meet the cost of seed paddy.
**
The result of the Ordinance was a certain loss of revenue to the Colony, but the No. 36, p. 2. Governor writing in February 1881 stated that, in his opinion, the loss will be amply repaid by the abolition of a system of taxation which from its liability to abuse was a reproach to the Colonial Government, and also by the encouragement which the "substitution of a fixed and moderate tax for the old tithe bolds out to every land- owner to improve his holding to the utmost," and he expected the immediate loss to be compensated for by more land being brought into cultivation and paying the
44
tax.
There is one other point to notice about the Grain Tax Ordinance which has been brought into prominence lately, viz.: that by section 18 the tax is made a first charge on the land; whereas before, under Ordinance 6 of 1873, movable property was to be proceeded against before steps were taken against the land. This change is made a
• Prior to the Ordinazos of 1878 El-wi or bill paddy was excluded from the category of dry grains, and was therefore taxed in the Kandyan provinces. In the Matale and Nuwara Eliya districts, however, no tax was levied, sud the only land revenue derived from the natives ontside the paddy tax has been rent of Crown lands for chean cultivation. (See Blass, pap. 22 of 1880, page 1.)
great deal of, but it is difficult to believe that it amounts to much, for the movable property of the Sinhalese peasant must be little or nothing, and the remedy must always have really been against the land. In any case it must be borne in mind that this law was not in force in Walapane at the time of the evictions.
For the last few years there has been little to notice except that the Grain Commis- sioners have been going from district to district bringing the commutation Ordinance into operation; that the Commission, which reported on the financial state of the Colony at the beginning of 1883, proposed to increase very slightly the import duty on grain, which proposal was not accepted; and that by Ordinance, No. 2, of 1887 one fourth of the receipts from the tax on home-grown grain is set aside each year for irrigation works, the amount entered on the 1889 estimates under this head having been 239,622 rupees.
The above is a rough outline of the past history of the grain taxes, and the following points are worth considering, though the Commission which is now inquiring into the subject will no doubt report upon them :-
i. How far is the revenue derived from these taxes necessary?
ii. Can other taxes be substituted for them?
iii. How far are they in themselves an evil?
As regards (i) the Commission of 1877 reported that the grain taxes and import (Eastern duties on grain yielded about one third of the ordinary revenue; the tax on home. No. 98, grown graiu realizing about 107,000l. and that on imported grain about 180,0001.
p. 58.)
In 1886, according to Ferguson's Directory, the receipts from the tax amounted
to-
Imported
Rs. 2,837,560 Home-grown
the total revenue for the year being Rs. 12,682,548.
Rs. 1,771,333 1,066,227
In 1888 the tax on home-grown grain realized Rs. 937,636, but the amount realized by the import duty cannot be given, as it is merged with other items under "Imports."
It may be assumed that these duties still furnish a very large proportion of the revenue, if not so large as 10 years ago; and if in 1877, financially the most prosperous year which Ceylon has known. the Commissioners reported against abandoning the revenue derived from these taxes, the same arguments would seem to apply with at (Eastern, least equal strength at the present day, not only because the total revenue is less than No. 26, it was in 1877, but also because some of the grain revenue is devoted year by year to P. 56, &c.)
6
a permanent irrigation fund hardly likely, if disturbed, to be replaced from other
sources.
p. 25; Int
Page of
It is assumed that the import duty and the home tax must stand or fall together. Mr. Wall, in his paper, expresses the opinion that the import duty should be retained, (Ceylon while abolishing the home tax. His words are Whenever the time arrives that the Mail, Oes. import duty becomes protective, that is to say, whenever the Ceylon goiya is able 19, 1889, to raise more than he can eat, and has any to spare and to sell, we shall attack the import duty. That, according to present appearances, will not be for a long time Cobden Clab "to come, and in the meantime the revenue cannot well spare it." Although the reprint.) Cobden Club have reprinted these words, it may be assumed that Ceylon, without a home tax on grain, but with an import duty on it, would be, if possible, in stworse state in their eyes even than it is now. The two taxes are the complement of each other; in Sir J. Longden's words, There is an equal tax on home-grown and on (Desp. No. imported rice, so that what is lost in the grain tax in an unfavourable year is made 155 of 1 up in the increased import duty, and what is gained by an increase in home April 1000.) "duction is balanced by a corresponding loss in import duties;" they must both stand or both be abolished.
"
pro-
ii. If then the revenue derived from these taxes cannot be abandoned can any other
'be substituted for it?
A reference to Eastern, No. 26, p. 71, etc. will show that the Secretary of State considered in 1878 how far additional duties on luxuries could be substituted for this tax on necessaries, and Sir A. Birch reported on the subject, but the result at which everyone appears to have arrived was, that only a land tax would be at all an adequate substitute, and that, Sir William Gregory considered, would involve a loss to the (Page 7 | revenue, as against the donble tax, of some 70,000). per annum.
E 61861.
A 2
8 of No.