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PUBLIC RECORD

OFFICE

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سلا

C.O. 882

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4 PUBLIC RECORD OFFICE, LONDON

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provinces soon after they fell under the British dominion. This was effected by certain proclamations, which at the time they were issued had the authority of statutory law, and which are still in force.

By the proclamation of 3rd May 1800 it was declared that on and after the 1st May 1801 all land within the maritime provinces then held in undivided tenure by more than one proprietor should pay to Government the tax of one-fifth part of its produce until the same should be divided amongst the proprietors, after which division the tax should be reduced to one-tenth, except when the land was subject to the payment of Anda, or any proportion amounting to or exceeding one-fourth part, the payment of which it was declared should continue as theretofore, or when the land was held on tenure of service.

By another proclamation, issued on the 3rd September 1801, it was declared that all obligation to service on tenure of lands should cease, and lands then held duty free on account of such service should pay to Government one-tenth of their produce if high lands and one-fifth part of their produce if low lands, excepting lands held upon certain specially mentioned tenures, which were to continue to pay one-fourth of their produce. Again, by a proclamation of the 22nd April 1803, it was declared that in all cases where no share of the produce of the land transferred should have been reserved to Govern- ment by any specific grant or title, or by any general legislative provision, the share to be reserved for Government was thereby fixed at one-fifth part of the produce of all low grounds in the districts of Chilaw, Colombo, Galle, Matara, and the Mahagampattoo, and at one-tenth of the produce of all other lands, excepting such gardens as did not contain the number of 10 fruit-bearing trees, which were to remain free of all direct contribution to Government.

It will be seen from these proclamations that in the maritime provinces, to which only they apply, a certain share of every kind of produce (except that grown in small gardens) was payable to Government. That share varied greatly, but in no case was less than one-tenth. It still varies according to tenure and custom from one-half, which is the rate payable by tenants of Crown lands, to one-tenth, which is the common rate now payable in respect of private lands, over which the Crown has relinquished all manorial rights. Where a higher share was payable the Government in 1813 made provision for the redemption in perpetuity by the landowners of the excess over the one-tenth, and landowners have largely availed themselves of this privilege. The result is that the Government share in respect of the produce of private lands is now s0 generally one-tenth that the grain-duty is commonly spoken of as the "Government tithe."

The Government have long since abandoned their right to a share of any home-grown produce, except paddy and certain "dry grains,” as they are called; and this remission has proved a great benefit to the rice-grower, for most cultivators of rice have some share or interest not only in the rice-fields which they cultivate, but in the adjoining high lands also, and it is well known that, where the tax on paddy is commuted, the commutation is not unfrequently paid by the sale of the untaxed produce growing upon the high lands and gardens of the cultivator.

The expression "grain tax," by which the impost is now known, might lead persons to suppose that the staple food of the people had been specially taxed, whereas this expression has arisen from the fact that the impost on all other home-grown produce has been remitted.

The above remarks apply to the maritime provinces only.

In the Kandian provinces the tax on paddy was fixed at one-tenth by the proclamation of 21st November 1818, excepting in certain districts in which the Government, to mark their sense of the loyalty of the inhabitants during the insurrection, reduced the tax to one-fourteenth.

In the Kandian provinces, since their acquisition by the British, no tax has been levied on any kind of home-grown produce, except paddy. The paddy grown in the Kandian provinces on lands belonging to the Budhist temples is exempt from taxation.

In addition to the impost on home-grown grains there is a tax on imported grain, which amounts to about 10 per cent. on the value, and this corresponds approximately to the tax on the home-grown article.

This import duty, which is of long standing, is now levied on the authority of the Ordinance 17 of 1869 and 14 of 1871. It is collected easily and without much expense, is little liable to evasion, and is very productive. In 1877 it amounted to Rs. 2,109,072, the duty on home-grown grain amounting in the same year to Rs. 1,303,856.

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The duty on home-grown grain was originally paid to the Government in kind, but this mode of collection being obviously fraught with inconvenience it was in time superseded by what is commonly called the "renting system or by commutation.

Under the renting system the right to collect the Government share was sold each year by districts or villages to the highest bidder at public auction, the risk and burden of collection being thrown upon the purchaser. In all cases, however, it was open to the cultivator to commute the tax by a fixed money payment for a certain term of years if he and the Government agent could agree as to the amount, and in districts where the supply of water for irrigation was fairly constant and nunual crops might ordinarily be anticipated, this mode of paying the tax was extensively adopted.

The revenue last year from the tax on home-grown grain was Rs. 1,303,856, In the hill and out of this sum Rs. 391,576 was derived from commutation. country, where there is an abundant water supply, commutation is almost universal.

In 1840 an Ordinance (No. 14 of 1840) was enacted for the purpose of securing and regulating the collection of the grain duties. It began by declaring the continuance of the existing grain taxes, and contained several provisions both for securing the due payment of the tax, whether commuted or payable in kind, and for protecting, as far as possible, the cultivator from extortion on the part of the tax farmer or "renter," as he is called, and the renter from evasion on the part of the cultivator.

In 1865 a short Ordinance (No. 29 of 1865) was enacted to explain the meaning of the expression "dry grain," as used in the Ordinance No. 14 of 1840, and later the Ordinances 5 of 1866 and 6 of 1873 were passed to facilitate and regulate the recovery of grain tax commutation as well as of moneys due to Government by defaulters in other matters.

There can be no doubt that the "renting" system is open to abuse, and that it must operate in many cases vexatiously, and so tend in some degree to the discouragement of rice cultivation, notwithstanding the careful provisions which the Ordinance 14 of 1840 contains for the protection both of the cultivator and the renter. Still the evils of the system have been much exaggerated, and it is worthy of note that the complaints against it have come rather from philanthropists and political economists, who object to the system as opposed to correct principles of government, than from the cultivators themselves. The Sinhalese agriculturists, however, though ready enough to make # stand against what is new and unfamiliar, are slow to complain of the evils of a long established order of things, and it is possible that the renting system has affected the interests of the cultivators more injuriously than the paucity of complaints might lead us to suppose.

The new Ordinance, which puts an end to this renting system and substitutes a money payment for the payment of the grain-tax in kind, consists of two parts:~~

Part I., which is to come into operation on the 1st May 1879, enables the Governor to create the necessary machinery for carrying the measure into effect, provides the modus operandi and lays down the principles upon which the amount of this money payment, which is to take the place of the payment in kind, is to be determined.

When all the necessary preliminary steps have been taken for any district, Part II. of the Ordinance, which abolishes the existing and introduces the new system of assessing and collecting the grain tax, will be brought into operation in such district.

It is intended to bring the new system into operation district by district, the Governor, with the advice of the Executive Council, being empowered to introduce Part II. into any district by Proclamation at some future date to be mentioned in the Proclamation. During the interval between the publication of the Proclamation and the time thereby fixed for Part II. of the Ordinance to come into operation in the district, and this interval may from time to time, if necessary, be extended. All the necessary information will be obtained, and the way paved for the introduction of the new system.

As soon as Part II. of the Ordinance comes into operation in any district, the Ordinances above referred to, Nos. 1 of 1840, 29 of 1865, and 5 of 1866, will cease to have any force or operation in such district.

Section 5 of the Ordinance retains the existing grain taxes, but enacts that these taxes. shall, under the new system, bo commuted in one of three ways, that is, either-

(1.) For a fixed sum payable annually; or

(2.) For a fixed sum payable in those years only, in which the land produces &

crop; or

(3.) For a sum varying with the estimated value of the crop, and payable in those

years only in which the land produces a crop.

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