PUBLIC RECORD OFFICE
Reference:
TICO. 882
سائس سياسيا
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
4 PUBLIC RECORD OFFICE, LONDON
74
Government fixes the number of taverns licensed to sell arrack in each district, and fixes the price at which arrack shall be retailed which is generally about 400 per cent. over the price at which it can be manufactured. The monopoly to sell within each district is then annually sold by public auction, and although the number of taverns has in the past five years been reduced from 1494 to 1092, or say an actual reduction of 402 taverns, and the retailed price of arrack raised from about 4s. 9d. to 6s. 4d., the revenue from this source has increased in the same period from 160,000l. to 217,400%. I am in favour of an alteration in the system of farming this revenue to check the present illegal sale at the private distilleries. If my scheme is adopted I believe the revenue from this source will be increased, but I am opposed to further raising the price of this spirit, and every endeavour should be made to reduce the number of existing taverns in the rural districts.
J
The Government salt monopoly gave a revenue of 78,4811. (less cost of collection); in 1876 the rate charged at the Government stores 2r. 36cts, per cwt. or say d. a pound. The consumption of salt is increasing, and will continue to increase as the means of communication with the interior improve. The expense of collection and storage vary in the different localities. Prison labour is utilized at the larger lagoons, and the In its practical operation this average cost may be taken at from 3d. to 4d. a bushel. monopoly is the nearest approach which indirect taxation is capable of making to a direct poll tax. In a country which subsists so largely on a vegetable diet, it falls universally, but in the smallest and unfelt proportions, upon every member of the community. Excluding the amount exported, the present sale gives an annual consumption of about 12 lbs. a head at an expence of about 6d, each to every class of the inhabitants. It said that if the grain taxes were abolished the salt tax is the only tax that would reach at least one third of the population engaged in agricultural pursuits, and that this portion of the community would be freed from the duty of paying their fair proportion of the expenses of the general government, education, hospitals, the progress in opening the country, and the general improvements which are proceeding throughout the Island.
up
be may
The subject of the salt tax has on more than one occasion been inquired into. In 1846 it was proposed to increase the rates charged at the Government stores, but this idea was abandoned, and more recently the question of abolishing this monopoly has been considered; the reports, however, received from the most competent officials, con- vinced both Sir W. Gregory, and his predecessor, Sir H. Robinson, that the throwing open of the salt trade wold instead of being a boon to the native consumer be of dis- advantage to him, and often inflict great hardship upon him; the trade must then fall into the hands of native speculators of small capital and of small forethought. The large stores of salt always kept up by the Government to meet the deficiency of bad years would not be maintained, and jobbery and extortion would replace the present system which upholds regularity of price, unfailing supply, and which presses so lightly on the consumer, about 6d. per head per annum, as I before remarked.
Sir W. Gregory after five years' careful consideration of the system of taxation in Ceylon, and with a strong desire to revise it, arrived at the conclusion that no equivalent for the duty on imported and home-grown grain was to be found, except a general land tax, involving, from his calculations, a loss to the revenue of from 60,000l. to 70,000%. per annum, and the grain commission arrived at the same conclusion so far as relates to the equivalent. It has been argued by those who desire the abolition of this tax, that the elasticity of the revenue would justify its total abolition without any further taxation in substitution of the present impost, and they point out that while the progress of the Colony in the past 10 years has been very marked, the revenue from the grain tithe has not increased in proportion to the general prosperity. The elasticity of the revenue has enabled the Government to prosecute with vigour the construction of roads and bridges, to establish hospitals in every district, to restore irrigation works, and undertake other reproductive public works which bave largely contributed to the increasing prosperity, and are of enormous benefit to the people generally. There is still much to be done in opening up the country and restoring tanks and irrigation channels, and I should regret to see any reduction at present in the light taxes which are now cheerfully paid. For several years to come the increasing revenue can be most profitably spent in the general improvement of the people, and I do not admit that the tithe or rent- charge has tended to interfere with the cultivation of rice. In support of this opinion may be noted that the cultivation of rice over the 370,010 acres of temple lands held free of all tithe or tax and including some of the best rice land in Ceylon has not progressed to any greater extent than the cultivation on other lands during the same
75
period. Sir William Gregory in the 16th paragraph of his despatch of January 1877, shows that the grain tithe has risen from 37,9607. in 1836 to 110,0047, in 1875 and has all but doubled in 20 years. The comparatively slow progress in extending the cultiva- tion of rice may be attributed to many causes. In the vicinity of the chief towns and in the coffee districts the more remunerative employment of the carting traffic in coffee, rice, manure, &c. has attracted large numbers of Singalese cultivators to this new field of labour, and paddy lands have been converted into grass fields for the largely increasing number of foreign cattle required for this traffic. Many agriculturists in those districts- where, through the gradual destruction of tanks and the undoubted change of climate, the cultivation of rice is at best hazardous—have elected to seek employment under the Public Works Department, where they are secure of regular remunerative wages, while in other more remote districts it is within my personal experience to have seen paddy left on fields and lands ready for cultivation left barren, because a previous good harvest had filled the village granaries, and for want of communication with the more populous districts there was no local demand for surplus produce. On the other hand it may be noted that in those districts where roads and bridges have been constructed and tanks repaired cultivation is largely increasing, and in the districts I refer to the cultivator not only pays the tithe but in most instances also makes an annual payment of 28. an acre towards the repayment of the original outlay in the restoration of the irrigation work under which his land is situated.
In support of this statement, I would draw attention to the progress made in the two districts in which the improvement and restoration of irrigation works has been systematically carried on. I find that 1865-6 represent two average years prior to the expenditure on irrigation works, and taking these years and 1875-6, we find—
Batticaloa, Eastern Province
Neuvara-kalawayia, N. C. Province
Bushels.
Bushels,
1865 1866 1865
-
490,114
-
580,734
1875 1876
742,857
·
735,140
-
1875
216,970
1876
-
284,409
32,187 1866 71,009
It should be remembered that paddy lands differ from coffee and other plantations in this respect that, whilst the proprietors of the latter have obtained possession of them by purchase from the Crown, the owner of the rice field was originally a tenant on sufferance without any purchase whatsoever, and that his present assessment includes not only a tax to the Government, but un actual rent on his farm. The land tax on tithe is the realisation of a principle with which the Singalese are universally familiar; that the soil is the undisputed property of the Crown, and that the Government is entitled to a share in its profits. To abolish this source of revenue at present, or until the Government surveys have so fur advanced as to enable a fair general land tax to be substituted, would leave nearly one-third of the people of Ceylon comparatively free from taxation. If the revenue continues elastic I should be glad to see the whole of the revenue derived from the grain tithe devoted to the restoration of the irrigation works throughout the Island, and I am satisfied that this policy will tend more to the ultimate benefit of the native population than the relief now sought to be obtained by the abolition of a tax which is willingly paid by those on whom it falls.
In conclusion, I think it right to mention, as a powerful argument against a land tax, that it was formerly tried, but repealed, by Sir Edward Barnes, owing to the universal discontent which it engendered. The present paddy tithe is a portion of that tax which it was found could be collected without difficulty and disturbance. It is in fact a rent to the Crown which was remitted in other cases as a boon, and so it should, I submit, be regarded.
I attach to this paper a paragraph from the original draft report prepared for the Grain Commission, showing the relative taxation of the Singalese and Indian cultivator. Also a memorandum from Mr. Elliott of the C. C. I., showing that while the Indian system of land tax is held up as a model for Ceylon to follow, the corruption complained of under the Ceylon system is probably more prevalent in India than in Ceylon.
A. N. BIRCH.
7/5/78.
No comments yet.
Private notes are available after approval.