PUBLIC RECORD
OFFICE
Reference :-
C.O. 882
5 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH NOT TO
(Page 72 of No. 26.)
It was contended, too, that a land tax would be distasteful to the people, and that fuller surveys would be required before it could be carried out. However this may be, the following considerations should be borne in mind. Either the land tax would be on all land, cultivated and uncultivated alike, or on cultivated land alone. In the former case, it would presumably press very hardly on the natives, even if uncultivated No. 26, p. 14. land were leas highly taxed than cultivated, as Colonel Fyers suggested, for each village would be taxed on all its land, whereas it would possibly have very little in any given year under cultivation to pay the tax. In the latter case it would not differ from the present tax, except that it would include other cultivated ground besides paddy land. For the paddy tax when commuted for a fixed payment per year is simply a land tax. No. 36, p. 1. Under annual commutation "the grain duty becomes virtually a tax on the land, independent altogether of the yield of the land, and therefore offering every encouragement to the cultivator to improve his cultivation, knowing that the tax "will be the same whether he doubles his produce or not."
(No. 20, p. 58.)
No. 26, p. 59.
(No. 26, p. 72.)
(No. 26,
P. 5.)
(Ceylon
Mail, 19th October 1889, last page but one
of Cobden
Club re-
Irint.)
*
Indeed whereas, before the Ordinance of 1878 was passed, it was charged against the grain tax that it did not approximate to a land tax, it is now charged against it that it does. Thus the Assistant Government Agent for the Nuwara Eliya district who has been writing against the late evictions, states, that by the Ordinance" the ***Tand has been made liable for the tax in the first instance, in fact, the tax has been converted from a tax on the produce of land into a land tax pure and simple," and adds, that "however unjust and oppressive the renting system was, it never drove the people from their villages and left them to wander forth as thieves and vagabonds
4
带着
"over the face of the country."
Thus it appears that, whereas the only practicable substitute for the grain tax has been declared to be a land tax, compulsory commutation is declared already to have brought about a land tax.
Then it may be asked, why is paddy land alone taxed and other cultivated land left free of tax?
14
L
It has already been stated that originally the tax was on all products, but was, early in the century, narrowed to grain. In the words of the Grain Tax Commission of 1877 The collection of the tax on gardens and small plots was found to be so objec- tionable, and attended with such an amount of resistance, evasion, and extortion, 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 the cocoa-nut and other plantations was tacitly abandoned. In "1797 a special tax on cocoa-nut trees was imposed which had to be at once abandoned
owing to the general discontent to which it gave rise."
The result of not taxing these other products is that in many cases the paddy grower, owning also some other little source of subsistence, has been better able to pay his grain tax; indeed it is one of the charges adduced in the Walapane case, that the unfor tunate villagers had to defray their taxes on grain from other sources than the grain itself; and in the Central Province it is understood every paddy cultivator owns, in addition to his paddy land, a certain amount of dry land also.
But supposing that the time were ripe for a general land tax, which the Commis- sioners of 1877 admitted had much to commend it, which was supported by an officer of such great local experience as Sir C. Layard, which the Secretary of State in 1878 adverted to as a possibility in future years, and which would tax also the Europeans' plantations; supposing also that the surveys were sufficiently advanced for it, that the popular feeling was sufficiently educated not to distrust it, and that no serious difficulties were to arise from the complicated nature of land tenure, it would still seem, in Sir W. Gregory's words, "manifestly unfair to let foreign rice enter free and to retain, in the case of the homo producer of rice, a tax from which the foreigner is exempt." Yet this would be done if the home tax were kept under the name of a land tax, while the import duty was abolished. On the other hand, if a general land tax were imposed but the import duty were still retained, cultivators, other than paddy growers, would pay the tax twice over; while if a tax on paddy land only were imposed and the import duty still kept, where would be the difference from the existing system?
C
iii. Apart from the question whether these taxes are necessary, are they wholly an
evil?
Taxation of food is generally condemned by economists, and according to Mr. Wall there food taxes have driven paddy land out of cultivation.
He says, "the area
5
"of land under paddy cultivation in the island has actually declined from 605,757 acres in 1883, to 562,016 acres in 1897, a falling off of 43,741 acres in five
years.
Some inquiry ought to be made from the Colony on the subject, as it is very difficult to ascertain the real facts of the case, and even if paddy land has gone out of cultivation it may be simply due to the fact that the people find it more profitable to use imported rice from India (which is of better quality than their own home-grown grain), and to grow other products. In that case, however, the ground for irrigation works would to some extent be cut away.
From the Blue Books it appears that the estimated total area of cultivated land in the Colony was~-~
In 1878, 2,134,644 acres.
In 1883, 2,083,765 In 1888, 2,221,428
31
+3
Thus in 1888 there were 86,784 more acres under cultivation in the island than in 1878, and this in spite of some years of the greatest commercial depression; though, on the other hand, by 1888, tea planting had begun to make great strides.
There was, however, a large falling off in the area of cultivation in 1888 over 1878
in the Kegalla, Ratnapura and Kalutara districts of the Western Province, and also in the Eastern Province; and the Eastern Province, e.g., is a part where cultivation would mainly be rice cultivation.*
At the same time the import of rice, which in 1878 was valued at Rs. 2,091,776, in 1888 was valued at Rs. 2,153,209, the largest amount chronicled of late years. This increase, however, seems to be no more than is commensurate with increase of population. The statistics suggest an inquiry from the Colony as to-
i. Whether, in spite of extended irrigation, paddy cultivation is on the decline.
ii. Whether, if so, it is duo, as far as can be judged, to a bettered or to a deteriorated
condition of the natives.
reverse.
Unless actual facts can be adduced to show that the tax is driving land out of cultivation, in the opinion of many of the best judges of Ceylon it is doing the very The Sinhalese, it is said, simply live from hand to mouth, and grow just enough to feed themselves. They can in most cases grow more, and if they have to pay a tax they do grow more; in other words moderate taxation tends to bring more ground into cultivation. This is of course compatible with hardship in some parts and under some conditions, but Ceylon is no starved-out over-populated land like parts of India, it is on the contrary a fairly fertile country with a very moderate popula- tion, and only wanting a better water supply in certain districts to give comfort and plenty to its people.
Further, in favour of the tax, it may be said that according to the inquiries made by the Commission in 1877, Ceylon is, or was, very lightly taxed as compared with Eastern, Jndia, and these grain taxes, the main taxes on natives in town and country alike, are No. 26, p. 76. taxes in a form which if there is to be any taxation at all, is apparently congenial to the
people. In the words of the Commission of 1877 the tax on paddy is conformable Eastern,
with ancient usage and acquiesced in generally by the people."
No. 26, p. 60.
44
The Local Commission now inquiring into the subject will probably soon report. In the absence of their report it seems that→→
(a.) The revenue derived from these taxes cannot be dispensed with;
(b.) The home tax is now practically a land tax, and presses hardly in some cases for that very reason, i.e., because under the usual system of annual commuta- tion it is a fixed tax not varying in amount for seven years;
(c.) In badly irrigated districts it would seen that the hardship might be avoided by encouraging the natives to take crop commutation, as being less rigid than the other alternative. In Sessional Paper xix. of 1889, being a report on the grain tax settlement of the Matale district, it is stated that "Crop commutation was gratefully embraced where the means of irrigation were thoroughly precarious, but it was not generally popular;'
44
(d.) Inquiry should be made as to the increasing or decreasing ares of paddy
cultivation in each province and district.
(e.) It seems unfair at first sight that the European plantations should not be taxed, but the answer is (1), that in other ways the Europeans contribute
• Probably the statistics of acreage are a mere guess, and the decrease is in great measure due to a more careful estimate.
much more than the natives to the revenue; (2), that the planters really pay much of the import duty on rice, as a great deal of the imported rice is for the Tamil coolies, and the higher price of their food means higher wages from their employers so that a land tax should be in lieu of, not in addition to, the import duty; (8), that if European plantations are taxed, native plantations with the same or similar products, which are now exempt, must be taxed also.