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PUBLIC RECORD

سلسل

Reference -

TC.O.882/12

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PUBLIC RECORD OFFICE, LONDON

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7. In their discussion of the incidence of taxation the Commis- sioners lay stress on the fact that the well-to-do classes with incomes over about Rs.12,000 per annum are, in comparison with others, very lightly taxed, while the burden of taxation falls relatively heavily on the poorer sections. I do not think it is possible to controvert this view. It is perhaps an inevitable condition communities where the greater part of the taxation is raised by indirect means, as is I think common in the smaller colonies, and is by no means confined to Mauritius. The remedying of this situa tion as a general measure of reform, apart from any question of financial stringency, is a policy which I think must command agree- ment. It must be admitted, however, that a time of acute financial depression is a peculiarly difficult one in which to bring about the change, and I may perhaps add that the special conditions in Mauritius, the psychology of its inhabitants and the history of its development make such a change more than ordinarily difficult here. It may fairly be urged that the burden of the new taxes proposed by the Commission is by no means heavy when compared with that borne by taxpayers in England or even in less heavily taxed European countries, but it should not fairly be measured by that standard but by its impression and effect on the people of Mauritius. While the amount of the proposed taxes may seen extremely moderate I must confess I have grave doubts as to the actual effect of the imposition of such a tax at the present time. and feel bound to submit for your consideration the reasons for these apprehensions. They refer principally to the proposed occupiers tax.

8. In suggesting this tax the Commissioners have been influenced by the difficulties in the way of operating an income tax in the conditions prevailing in Mauritius and the fact that it could not in any case be brought into effect without considerable delay. The latter argument is not open to question. With regard to the pro- posed tax they state in the rough draft of this section of their report that they "find it difficult to believe that the owners or occupiers of the spacious houses which cover so large an area in Moka, Curepipe, and other residential districts have been reduced to such financial straits as to be unable to bear even a moderate addition to their present comparatively light burden of taxation." They also remark that an estimate of taxable capacity under the conditions here must necessarily be a matter of guess work and the guess will usually be an inference drawn from appearances more particularly from the size and style of the house in which he (i.e., the potential taxpayer) lives." I do not controvert this view in principle but I feel bound to say that I think it is very easy for anyone without experience of local conditions to form a very false impression of the degree of financial prosperity which residence in a large house with spacious grounds may represent in Mauritius. These houses are in many instances an inheritance

:

from the past in others they have been constructed or bought in According to our standards I do not

"' overhoused "' the days of prosperity. hesitate to say that most Mauritian families are a condition which may possibly arise partly from the almost universal prevalence of large families. On the other hand the cost of upkeep of these houses is not in any respect comparable with that of houses of similar class in England: and the very light local taxation to which the Commissioners refer makes it possible for families to continue to occupy their houses in times of depression and to reduce their expenditure to an astonishingly low level. No doubt the apparently inexhaustible resources of local credit help also to make this possible. It is impossible to support this view with actual data, but as an illustration of the position I may say that I should not be at all surprised if many of those living in Louses of 30,000 or 40,000 rupees in value would in present times be found to have actual incomes of under Rs.12,000. In such a case an additional direct tax of Rs.1,500 to Rs.2,000 would be n very severe burden. In the case of a rented house the position may be more difficult still. I have an instance in mind at the moment where a house assessed at Rs.40,000 in value is offered for rent at Rs.2,400 per annum-this, of course, is not an economic figure, but economic rentals on houses of high value are not obtain- able at present. If in addition to the rent the occupier is required to pay Rs.2,000 by way of occupiers tax it need hardly be said that the house will never be let. In the case of smaller houses leiting at a rental of say Rs.125 per month the average value may be taken at Rs.15,000 to Rs.20,000. The additional tax payable on such houses would vary from Rs. 150 to Rs.400 per annum. In the case of the lower figure this would not be an excessive burden but the higher figure would in many cases I think involve a change of residence especially in the case of an official who would suffer a ten per cent. reduction in his salary as well. In the case of the larger houses I cannot but entertain considerable anxiety as to the effects on property under present conditions of a tax at the rates proposed, moderate as they may seem to those accustomed to English standards of taxation.

"' over-

9. It might naturally be argued in reply to these observations that if the apparently well-to-do are in fact so greatly housed" that they cannot afford to pay a direct tax of say Rs. 1,200 to Rs.2,000 a year they should restrict their style of living and move to smaller houses. In a larger country this would be answer- able the larger buildings would in most cases find other uses and the shock of the disturbance in values would be dissipated over a wide area.

In a small island, however, the shock of any such movement is very much more severe; the number of smaller build- may become ings available is inadequate: the larger buildings which vacant would remain untenanted and be left on the Government's hands, and the psychological effect of the position would be