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PUBLIC RECORD OFFICE
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C.O.882/12
ALLY WITHOUT PERMISSION OF THE BF REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
PUBLIC RECORD OFFICE, LONDON
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6. On the other side of the account additional taxation is
pro- posed estimated to produce rupees 955,500 during 1931-32. Of this rupees 131,000 is obtained by a large increase in the licenses payable by Companies, Docks, Bankers, Merchants, and Dis- tillers; rupees 124,500 by changes in customs duties chiefly by way of higher import duties on tobacco, and the remaining rupees 700,000 by a new Occupiers Tax on houses both in urban and rural areas, but limited to houses over rupees 5,000 in value, and graduated in amount from 5 per cent. on capital value on houses of rupees 30,000 or over to per cent. on houses between rupees 5,000 and 10,000.
This tax, in the case of urban areas, will be in addition to the tenants tax now payable to the municipal authority which is very light in amount.
It is proposed that these taxes should be brought into effect in the current year.
7. The Commissioners propose that the special export duty on sugar collected under Ordinance No. 16 of 1929 should be remitted but that the money collected should be retained and applied to pay- ment of the arrears of revenue due to the Railway from many sugar properties, only the balance after payment of these dues being refunded. I may say that I am very doubtful as to the practica- bility of this proposal. The persons who have paid the export duty are not in a great many cases those from whom the railway arrears are due as the duty is presumably paid by shippers or merchants. The Commissioners suggest that as the machinery of the sugar factories was used to distribute to those entitled to it the loan of £1 per ton paid on last year's sugar crop, so the same machinery could be used to arrange for the pro rafa distribution of the residue of export duty refunded. The conditions do not appear to me to be at all similar and I have very strong doubts as to the practicability of the proposal. Moreover, I am not in accord with the principle and believe it would be very strongly resented. It is, in my view, open to strong objection that money collected provisionally from A for one purpose should be applied to the payment of a debt due by B for an entirely different object and I do not think the machinery of the industry can fairly be adapted to this adjustment. I believe that if the financial situation does not permit of the repayment of this money it should be retained for the purpose for which it has been provisionally paid. In my opinion the adoption of the suggestion of the Commissioners would arouse very strong feeling and I am sure that those concerned would feel that they had been tricked" by the Government. If the money is not returned to them and they are not to have the use of it it should be applied to its original purpose.
8. This brief summary of some of the principal proposals in the report is not given with a view to indicating their financial effect and I am unable in the short time available to comment on their
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advisability or otherwise. I may say that I am in the great majority of cases in accord with them. The object of this outline, however, is to indicate that the proposals taken as a whole constitute a drastic revision of the system of administration and taxation and involve a departure from principles rooted in past traditions and supported by the strongest vested interests in the Colony. Although I understand that most of their proposals have been suggested by one or other of those whom the Commissioners have interviewed privately yet when it comes to public discussion a very different attitude may be expected from many of those who supported particular proposals in private. The large number of officials to be retrenched, the general cut in salaries, and the new taxation taken together will, in my view, serve to combine against these proposals nearly every interest in the island. In these circum- stances I am of opinion that to attempt to put all these changes into force in the course of a few months is likely to prove to be beyond the powers of the Government, and taken together with the proposals for railway reorganization which are referred to below would constitute a disturbance of long-established conditions which if insisted upon may lead to breakdown and disorder. I think it is highly important that this programme if adopted should be spread over a longer period, however sound the various plans may be on strictly financial grounds. I have not been able to examine the proposals with sufficient care to say positively whether the more gradual introduction of the various measures is practicable with the financial resources available but I desire to submit without delay the view that in the examination of these proposals the great importance of spreading the necessary reforms over as long a period as possible should be kept in view even at some sacrifice of financial orthodoxy. It was with this contingency in view that my telegram No. 116 of the 7th September was despatched. I will report as soon as possible after more detailed examinations of the proposals to what extent this policy seems financially practicable.
9. The view stated above is strengthened by the proposals of the Commission for dealing with the railway question. This matter stands upon a somewhat different footing from the rest of the financial problem inasmuch as the loss on railway working arises not so much from the general financial depression as from the permanent change in conditions owing to the development of motor transport. The Commissioners recommended that instead of having recourse to the various schemes of traffic control which have been put forward the Railway should be restricted mainly to goods traffic, leaving the passenger traffic to be carried by road. They suggest a modification of this policy by the operation of a few passenger trains between Curepipe and Port Louis if these can be run on a paying basis. I am reluctantly impelled to accept this view as probably sound but the consequences of its acceptance
C. 84590/31 [No, 17]: not printed.
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