JBLIC
PECORD OFFICE
Reference -
TATTIC.O.882/12
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3. On the whole the Customs Department is of opinion that we have probably reached the effective limit of increases in duty likely to produce increased receipts. Further increases, unless placed upon foodstuffs or supplies essential to the sugar industry, both highly undesirable expedients under present conditions, are, in the opinion of the Department, likely to be counterbalanced by decreased imports. I think it may be possible to secure some additional revenue from customs by a general surcharge of say 10 per cent. on all import duties, with the exception of essential foodstuffs, but the amount which might be raised in this way would probably not exceed Rs.300,000, if indeed it reaches that aniount. Apart from the influence of increased duties, it seems by no means unlikely that there may be a decrease in imports next year as a consequence of the general depression.
4. The prospect of raising further revenues by other means of taxation seems to me to be very unpromising. The general level of wages has been lowered during the last year to minimum level, and as is well known the position of sugar producers is such that the cruicial question in their case is not whether they can meet any further taxation, but whether they can find funds to continue operations at all after the crop of 1931.
There is no
doubt a certain small section of the people, or perhaps it would be more correct to say a certain number of individuals, with incomes from other sources which could be drawn upon for taxation if discrimination were possible, but except by means of an income tax it could not be practicable to discriminate. Such a tax could not in any case be brought into operation except after considerable delay, and then only in face of the united opposition of the entire Colony and of the Council of Government. Even in normal
times the conditions are such that the collection of an income tax would present peculiar difficulties in Mauritius: under present conditions I think it is scarcely an exaggeration to say that it would be impossible. The collection of all direct taxes in the Colony is a matter of great difficulty: and the amount of arrears outstanding is one of the striking features of the accounts. The organization for the collection of direct taxes and dues with the exception of the Licence duties is cumbersome, expensive, and ineffective, and though efforts have been made to improve it, there appears to be an accepted tradition that the majority of people only pay their taxes in arrear. No doubt changes can in time be effected in the system but such changes are hampered by the existence of a considerable permanent and pensionable subordinate staff reared in the traditions of the present system, and it would be a very facile optimism to hope that effective changes in organiza- tion could be brought into being within a short period of time. It is the general feeling that under present conditions increase in direct taxes is impossible, and when it is remembered that the industry which provides about 95 per cent. of the exports is being
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carried on at a loss so heavy that the possibility of its continuance is doubtful, and that all other business and trade is thereby seriously affected, it is difficult to argue that this opinion is un- justified. My own view is that except possibly in one or two special cases increases in the licence duties, house tax, or other direct imposts are unlikely in the conditions existing here to produce any increase in revenue commensurate with the cost of endeavouring to collect them, or sufficient to compensate for the irritation and depression that attempts to increase these taxes under present conditions must cause. Taking into consideration the progressive effect of the continuance of depressed conditions on imports, excise, and licence dues, and the greatly enhanced difficulty of collecting direct taxes in a time of acute financial I am inclined to think that the total increase in stringency. revenue which might be secured from all sources would not exceed at best about Rs.500,000 and may prove to be a good deal less.
5. It will be essential therefore to endeavour by economy in expenditure to go as far as possible towards making ends meet. Here again, however, there are serious difficulties to be encountered. The general expenditure shown in this year's estimates at Rs.14,729,460 represents a decrease on the actual expenditure of the previous year of Rs.845,541 and is lower by Rs.1,975,092 or nearly 12 per cent. than the average actual expenditure of the three preceding years 1926-27 to 1928-29: and that in spite of an increase of Rs.773,295 in public debt charges for 1930-31 as com- Of the present year's pared with 1928-29, and previous years. estimated expenditure of Rs.14,729,460 over 23 per cent. is repre- sented by permanent charges for public debt and pensions which are not susceptible of immediate reduction. If the other heads of expenditure are examined it will be seen that, omitting permanent debt and pension charges, the cost of administrative services under the current estimates is Rs.1,049,772 less than the estimate of 1929-30 and over Rs.1,900,000 less than their cost five years ago. There has, therefore, been already a definite and effective reduction in expenditure during the last few years, but especially in the current estimates, and it can scarcely be expected that this rate of In connexion with the 1930-31 reduction can be continued. Estimates, however, it should be noted that the anticipated reduction under the head of Education will not be fully realized as reported in Sir Allan Grannum's despatch No. 238 of the 6th June, 1930*.
6. I do not at all suggest that ultimately further reductions in expenditure by means of limitation of staff or reorganization of services will not be possible but any immediate and substantial decrease is made difficult by the existence of a large permanent staff
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C. 74594/:10 [No. 4]: not printed.
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