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PUBLIC

L L L L L L T

PECORD OFFICE

Reference

C.O. 882/12

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO)

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3. It will be noted that the majority memorandum so far departs from the attitude embodied in No. 1 of the Resolutions, passed at the public meeting held on the 15th February, which protested against any augmentation of taxation whatever, as to propose increases in taxation, including Customs duties, which they estimate to amount to Rs.847,000. Of this sum Rs.500,000 is attributable to Customs and Excise and Rs.347,000 to what may be described as direct taxation.

4. The proposals for levying an excise on local wines, and the greater part of those for the increase in Customs duties, had been already put in train by the Government. It is doubtful whether a duty on wine at the rate proposed (50 cents per litre) would in fact produce the estimated amount, but it has been urged that any resulting contraction in the consumption of wines would be com pensated by a corresponding increase in the rum excise.

5. The proposed tax on loans is an extension of the licence duty now payable by dealers in Bills and Loans under Ordinance 32 of 1915, Schedule H. This is at present scheduled at 15 cents per 100 rupees on the amount lent, and I must admit that it was with some surprise that I found that the amount at present paid under this head is no less than Rs.59,000, covering loans amounting to just under Rs. 40,000,000. Most of these are of course renewals of already existing loans, the licence being payable annually. If the increased tax be therefore adopted it will amount to an annual levy on capital used in this way to the extent of per cent. There are a considerable number of persons registered as dealing in these loans (over 370 entries appear in the register annually) and. although it cannot of course be ensured that the tax falls on the lender and not on the borrower, I think it may be admitted that it is one which falls on the whole of the well-to-do classes, inasmuch as loans below an annual total of Rs.20,000 are not taxable. It has been pointed out that a large amount is also advanced by brokers whose licence is limited to a maximum of Rs.1,200 annually, and that brokers' licences should also be increased. From conversa- tions with the Unofficial Members I gather that some corresponding increase in brokers' licences is recognized as fair, though it is urged that inasmunch as a large portion of the loans made by brokers are for short periods, a tax of 3 per cent. would be unreasonable in their

The loans taxed under Ordinance 32 of 1915, Schedule H, are chiefly mortgages. Loans made by Banks are not taxable, being assumed to be covered by the relatively high licence fee paid (Rs.2,000 per annuin). An increase in the Bank Licence is obviously indicated.

case.

6. The tax on interest on Government loans is unusual but in the circumstances, if it is confined to loans raised locally which are practically entirely held by local residents, I do not think that it would affect the credit of the Government to any appreciable

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extent. As most of the loans were raised at 6 per cent., it is equivalent to a tax of 60 cents per 100 rupees on the capital lent. It has been pointed out that this tax should also be levied on divi- dends declared by local public companies whose head offices are established in Mauritius. I gather there would be no objection to this and although in present circumstances the proceeds would be small as very few public companies have paid dividends, nevertheless I think the extension is equitable and should be made.

7. No details of the proposed increase of licence fees is given but it was suggested in conversation with the Unofficial Members that all licences over Rs.50 in extent should be increased by 10 per cent. This appears to be inadequate. It should be possible to increase such licences to give an increased yield of Rs.200,000 in a full year, not by a flat rate of increase but by discriminatory increases on the lines proposed by the Financial Commission, though at lower rates and extended over a wider range of licences.

In my

8. The question of the Occupiers' Tax is a difficult one. despatch of the 4th November, 1931, paragraphs 7-9, I discussed the difficulties which appeared to me to lie in the way of this tax and suggested, as the extreme measure of practicability, the reduction of the proposed rates by half with a maximum of 2 per cent. I must confess that further information and review of the actual difficulties in the way of collecting this tax convince me that the objections which I there raised were an understatement of the Numerous actual instances since arguments against this tax. given me have revealed the very great inequality of its incidence and the serious hardship involved in the case of many persons who, while living in very large family houses, have had their in- comes reduced to next to nothing or are living on the charity of their relatives. Moreover, difficulties in detail as to assessment in the case of flats, apartments and houses partly used for business purposes are considerable and would involve much delay in the collection of dues. One of the strongest arguments against the tax, however, is the fact that, if the Government by means of the Occupiers Tax encroaches so heavily on the taxable resources of local bodies, it will be impossible to require those bodies to sur- render the subventions they at present receive from Government and at the same time to assume in some cases increased respon- sibilities. In this connexion I enclose a copy of a statement received from the Township Boards urging the impracticability of withdrawing the Government contribution. I do not accept the conclusions set out by any means without qualification, but I think the position disclosed emphasizes the difficulty of withdrawing the contributions and at the same time encroaching on their taxable resources.. The contribution made to local Government bodies and the expenses borne by Government for township services, including

* No. 39.

Not printed here.

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