E 2
7. As in 1938 Cha Kwo Lin heads the list of persistent offenders. This village is so placed that it is almost impossible for revenue officers to approach it unobserved while at the same time it enjoys easy access to the large markets of Kowloon City and Shaukiwan. The institution of a special patrol in the neighbourhood of Customs Pass proved most efficacious in hampering the illicit activities of this district generally.
8. In April the Tai Sang distillery at Tsun Wan was detected in a serious case of evasion of duty. In principle the fraud was the ancient one of secret distillation and sale of unrecorded spirit, but the case was distinguished by the remarkable ingenuity displayed in tampering with the kongs of fermenting mash and in the manner in which the locked door to the spirit strong room had been adapted to give access to the spirit without showing any signs of illicit entry. The master of the distillery eventually pleaded guilty to evasion and subsequently closed down. Apart from this case the working of local distilleries was satisfactory throughout the year.
III. TOBACCO.
9. The total consumption of tobacco of all kinds for all purposes was 8,378,780 lbs; and the total net revenue from tobacco duties was $6,362,972. The records set in 1938 were thus exceeded by 814,745 lbs and $1,172,271 respectively, but in considering the revenue figures account should be taken of the fact that the amount of duty refunded on drawback was $2,985,126, which is $352,209 less than in 1938.
10. It is clear from a study of these figures that the increase in revenue as compared with the previous year is attributable to increased demand within the Colony itself. The enormous increase during the last three years in the manufacture of tobacco and cigarettes in Hong Kong is, of course, the result of unsettled conditions in China which have led to the transfer of business to this Colony.
11. In 1939 these conditions resulted in a shortage of Chinese raw leaf and Empire raw leaf was largely used as a substitute. The increase in consumption of this tobacco is 588,517 lbs. over 1938, whereas the increase in non-Empire raw leaf is only 157,872 lbs.
12. Cigarettes seized during the year amounted to 99,000 as compared with about 7,000 in 1938. Two large seizures were made, one of 44,000 cigarettes on the waterfront and one of 21,000 cigarettes on board a ship entering the Colony from Shanghai. The remaining seizures were all small and the cigarettes were mainly of Shanghai origin. It is probable that, as in the case of imported liquors, the depreciation of the Chinese dollar is tempting the smuggler with a handsome margin of profit.
13. Smuggling of Chinese tobacco from Macao continued on much the same scale as in 1938. Seizures have increased by about 2,000 lbs., but this is accounted for by the inclusion of 1,700 lbs. of tobacco from Sha U Chung which was seized as unmanifested cargo.
IV. MOTOR SPIRIT.
14. There was an increase of $440,483 in revenue in comparison with last year. This was due partly to the new taxation on hydrocarbon oils, whereby heavy oil used in road vehicles was charged thirty cents per gallon, and partly to the increase of duty on light oils from thirty cents to sixty cents per gallon as a result of the outbreak of the European War.
V. OPIUM.
15. The total amount of prepared opium sold during the year was 83,178.80 taels and the total net revenue was $914,145.25, an increase over 1938 of 58,149 taels and $622,026, respectively. This increase is entirely in respect of sales of Singapore opium, the sales of Kam Shan opium, which is sold only to a limited number of registered smokers, showing a decrease of 552 taels, or about 15%.
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7. As in 1938 Cha Kwo Lin heads the list of persistent offenders. This village is so placed that it is almost impossible for revenue officers to approach it unobserved while at the same time it enjoys easy access to the large markets of Kowloon City and Shaukiwan. The institution of a special patrol in the neighbourhood of Customs Pass proved most efficacious in hampering the illicit activities of this district generally.
8.
In April the Tai Sang distillery at Tsun Wan was detected in a serious case of evasion of duty. In principle the fraud was the ancient one of secret distillation and sale of unrecorded spirit, but the case was distinguished by the remarkable ingenuity displayed in tampering with the kongs of fermenting mash and in the manner in which the locked door to the spirit strong room had been adapted to give access to the spirit without showing any signs of illicit entry. The master of the distillery eventually pleaded guilty to whereas the increase in non-Empire raw subsequently closed down. Apart from this case the working of local distilleries was satisfactory throughout the year.
III. TOBACCO.
9. The total consumption of tobacco of all kinds for all purposes was 8,378,780 lbs; and the total net revenue from tobacco duties was $6,362,972. The records set in 1938 were thus exceeded by 814,745 lbs and $1,172,271 respectively, but in considering the revenue figures account should be taken of the fact that the amount of duty refunded on drawback was $2,985,126, which is $352,209 less than in 1938.
10. It is clear from a study of these figures that the increase in revenue as compared with the previous year is attributable to increased demand within the Colony itself. The enormous increase during the last three years in the manufac- ture of tobacco and cigarettes in Hong Kong is, of course, the result of unsettled conditions in China which have led to the transfer of business to this Colony.
11. In 1939 these conditions resulted in a shortage of Chinese raw leaf and Empire raw leaf was largely used as a substitute. The increase in consumption of this tobacco is 588,517 lbs. over 1938, whereas the increase in non-Empire raw leaf is only 157,872 lbs.
12. Cigarettes seized during the year amounted to 99,000 as compared with about 7,000 in 1938. Two large seizures were made, one of 44,000 cigarettes on the waterfront and one of 21,000 cigarettes on board a ship entering the Colony from Shanghai. The remaining seizures were all small and the cigarettes were mainly of Shanghai origin. It is probable that, as in the case of imported liquors, the de- preciation of the Chinese dollar is tempting the smuggler with a handsome margin of profit.
13. Smuggling of Chinese tobacco from Macao continued on much the same scale as in 1938. Seizures have increased by about 2,000 lbs., but this is accounted for by the inclusion of 1,700 lbs. of tobacco from Sha U Chung which was seized as unmanifested cargo.
IV. MOTOR SPIRIT.
14. There was an increase of $440,483 in revenue in comparison with last year. This was due partly to the new taxation on hydrocarbon oils, whereby heavy oil used in road vehicles was charged thirty cents per gallon, and partly to the increase of duty on light oils from thirty cents to sixty cents per gallon as a result of the outbreak of the European War.
V.-OPIUM.
15. The total amount of prepared opium sold during the year was 83,178.80 taels and the total net revenue was $914, 145.25, an increase over 1938 of 58,149 taels and $622,026, respectively. This increase is entirely in respect of sales of Singapore opium, the sales of Kam Shan opium, which is sold only to a limited number of registered smokers, showing a decrease of 552 taels, or about 15%.
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