CO882-(4-5) — Page 275

7, p. 18.

sional Paper,

of 1882,

duties.

ern No. 26,

08/85.

M

44

additional revenue should at some future time be needed.

Mr. Fisher also advocates “a light export duty on island-grown produce.”

In Sir Henry Ward's time export duties were imposed to cover the cost of the Colombo-Kandy Bailway, and there is still a special and small export duty levied on plantation products to defray in part the cost of the Medical Aid Ordinance, as well as a royalty on plumbago.

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64

When the Select Committee of 1882-3 considered and reported upon the financial condition of the Colony, Sir F. Dickson, in his supplementary report, proposed the levy of a general export duty for the maintenance of hospitals open to all classes. He maintained that Sir H. Ward's duties “were levied practically without cost, and gave rise to no dis satisfaction," and, by proposing to apply the proceeds of the duty to a special object, he would presumably have given it the character of a special rate; but his suggestion was made to meet a case of necessity, not to provide normal revenue, and it seems hardly worth while seriously to consider the suggestion of export duties, as they are on economic grounds so hard to defend.

12. An increase in the duties on imports other than grain is relied upon by the Governor to make up in part for the revenue now raised by the grain

tax. On this point reference should be made to Sir Arthur Birch's memorandum written in 1878. Sir A. Havelock has not yet stated how he readjust the tariff, and therefore only a few peneral general remarks can now be made. In 1885 the Customs duties were increased by Ordinanco 39 of 1884. In the words used by the Governor, when forwarding the use 20883/84. Ordinance, it" provides for a substantial addition to "the import duty on spirits, wines, and other articles “of luxury, and for raisng the ad valorem duty on " certain other articles from 5 per cent. to 6} per "cent. It is anticipated that the result will be an “increase of Rs. 200,000 in the annual revenue “ derived from Customs without materially affecting "the poorer portion of the population." This amount of extra taxation was practically thrown upon the Europeans and Eurasians, unless the increase in the ad valorem duty on curry stuffa touched the poorer classes of Natives. The duty on cotton goods was left unaltered. A rise in it would have affected the Natives, though only to a very slight extent, because of the very small amount of clothing worn by the agricultural population. That duty, it may be noticed, stands at 5 per cent, að valorem of the assessed value, whereas in India there is no duty at all, and previous correspondence shows that

any attempt to raise it would call forth the opposition of the Manchester merchants.

2008 and

7186; also

On the whole it may be said that, so far as Customs duties are relied upon to make up for the grain tax, it is shifting the burden from one class to another, whether for good or ill; it must also be borne in mind that the duties have been lately increased; and that, being for the most part levied on articles imported for European use, the revenue from them is likely, ss has been the case in past

years, to fuctuate very greatly according

or bad times in the plantations

13. The recommendations, which are now before the Secretary of State, are Sir Arthur Havelock's two alternative schemes for abolishing the grain tax, and the Select Committee's scheme 1 modifying it, upon which the Governor has furthe made his own suggestions.

Sir Arthur Havelock's schemes are as follową A. He would (a), abolish the paddy tax, and (6) reduce the import duty on grain from 29 cents

20 cents per bushel. To make up for (a) 'he wo impose a land tax of 18 cents per sore on alienated lands, and to make up for (b) he we increase the duties on salt and the Customs duties

B. He would (a) reduce the paddy tax to between one-third and one-half of its present ́rato, converting it into an irrigation rate pure and simple, and (b) reduce the import duty on grain from 29 to 21 cents per bushel. He would make up these lowes to the revenue by the same rise in salt as under the first scheme, by a very much higher rise in Customs duties, and by a succession: and legacy duty.

The following are the changes under his

schemes :-

Losses

SCHEME A.

Gaine.

Rs.

Land tax-

Bs. 1,068,600

$64,000

151,080

Paddy tax ander . (1,000,000 Import duty on grain 676,000 Salt

Paddy tax

Import duty

L

Custome

SCHEME B.

Re

650,000 | Sah

3:24,000

650,000 Customs

Legacy duty

880,000

78,000

These two schemes will, no doubt, receive the fullest attention, not only on their own merits and as being the first real attempt to work out an alternative policy to the grain, taxes, but also because their author has put them forward so very clearly, fairly, and dispassionately. In either case, it will be seen, he practically gets rid of the home grain tax and reduces the import duty on grain; and he makes up for them, in the first oase, by only imposing direct taxation to the same amount the he has taken away, and in the second case by resorting entirely to indirect taxation,

}

The objections to the two schemes, most of which may be gathered from the foregoing part of th memorandum, seem to me to be as follows:

(1.) The possible means of raising additional revenue are used up to provide a substitute for existing revenue.

X 64990.

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

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