1939-11-09 — Page 19

THE CHINA MAIL, NOVEMBER 9, 1939

INCOME TAX DEBATE

(Continued from page 18)

institution of several select commit- with various educational activities tees, on similar lines as the Urban Council for the purpose of dealing such as registration of private schools, awarding of Government scholarships and recommendations of grants aided schools.

to

A.R.P. EXPENDITURE In the matter of expenditure under Air Raid Precaution I wish to draw the attention of Government

to the total lack of provision for shelters for civilians who may be out in the open in time of emergency. I realise the peculiar formations of this Colony that make it almost impossible to pro- vide shelter for everyone, but I ven- ture to think that it may be possible at a small cost to build a number of small underground shelters or in the alternative to strengthen some of the public buildings in the City to provide for such an eventuality.

INCOME TAX

realise that some of these

FINANCIAL POSITION

I'

$13,562,235.00 as on 1st January 1999, without a serious dip in the curve.

represents over 33 per cent. of the total ordinary revenue for the whole year.

MR. SHIELDS AND CAPACITY TO PAY

tained.

►

LIGHTLY, TAXED The Unofficial Members of this Council welcome the assurances given by Government that a number of the schemes for which preliminary grants have been made will be reduced or deferred if Revenue shows signs of decreasing.

normal

not yet available to the Public, would only add that Income Tax, be- ing in reality not a simple Tax but a complex system of taxation, is not a desirable form of taxation for this Colony.

The Hon. Mr. A. L. Shields said:-- There have been many

I have no comments to make on any

It is true there is always the tax- put before the Government as alter-of the items in the Estimates now be-payer to fall back upon and you Sir

proposals native methods for raising the neces-

fore us but would express some con- stated in your speech on 12th October that this Colony is lightly taxed. Any sary revenue for this war budget. Icern that the estimated Revenue to meet the Expenditure is based on re-

taxation which can be avoided is an proposal

unnecessary burden on the Commun- turns for the current year and in an- would place the main burden of the additional taxation on some particular ticipation of these figures being main-ity. The taxpayer's capacity to pay is not unlimited and in a serious depres- sections of the community but as war measures a certain degree of inequa-about the ultimate future of the Co-heavy taxation will tend to make the While I am in no way despondent sion such as we have seen periodically, lity is unavoiable.

lony I must voice the views held by taxpayer fold his tent and imitate the the General Committee of the Cham- proverbial Arab. It will certainly ber of Commerce that future Revenue keep out new capital and new indus- I hope that the Honourable Finance Secretary will agree with me ports, the advent of the War which Governments much heart burning and the may be seriously affected by the con- try, and a vicious circle on the down-

tinuance of the closure' of

track Chinese ward that the financial position

may well cause future

Colony is not at all

of the with possible trade restrictions for the anxiety. is, in fact, quite sound. The Colony's interference with the free movement

precarious but

conservation of currency, Government

CHINA TRADE surplus at the end of 1939 would pro- of trade by the use of import and ex-trade much of the money now here

When China reopens to bably be more than what is budget-port permits, the stoppage of trade may seek investment ed for in the revised estimate when with Germany and the reduction

and business we take into account

of opportunity elsewhere. The improv- the fact that Steamship space available duties on petrol and liquors have been higher freight rates.

at much ing facilities in neighbouring ports The proposed imposition of Income came into effect on the 2nd half of of Government still grows

doubled and the increased assessment

and the possible provision in these The burden of expenditure for cost ports of duty free zones will be in Tax has been dealt with by honour the year.

like the direct competition with Hong Kong, able members who spoke before me,

"green Bay tree", Pensions and Emo- It may be said that Hong Kong will and I am in agreement with the re-ment fail

In my humble opinion if Govern- luments are increasing, we have to always be attractive on account of the marks made by my Chinese Collea- amount of revenue for the

to raise the necessary provide large sums for social services, security offered but I believe the old gues.

require- Defence etc. and necessary Public order in China is over. The new Before I offer my personal obser- of taxation other than

mments of the war budget by means Works have to be postponed in spite China will be run by Officials whose vations on this very important matter the Government could

Income Tax, of our inflated revenue due to unusual increasing patriotism will oblige them I wish to say that the Chinese Com-

fall back on conditions which even the most op- to do the best they can for their own the munity, whose views

Colony's Chinese

surplus which, attimistic can hardly expect to continue

(Continued on Page 24) colleagues and I have the honour to represent, are not unconscious of the i duty of all citizens in this Colony in connection with the present war in Europe. They realise. that the Colony should do its utmost to make contri- butions to the war chest to the full extent of its resources as a token of the Colony's loyalty to the Imperial Government. The Chinese Community are most grateful for the protection and security afforded to them in this Colony and I feel that they will not hesitate to give their support to the Government in any financial mea- sures other than Income Tax in con- nection with the war. The opposition to the proposed imposition of Income Tax as far as the Chinese Community are concerned, is not based on any political grounds but is entirely for economic reasons.

my

DAMAGE FEARED

I share the view which has been expressed both inside this Chamber and outside that in view of the peculiar economic structure of the Colony as an entrepot which is apt to be ad- versely affected by the war in Europe the imposition of this form of taxa- tion at the present juncture may in- flict such damage to the vital inter- ests of the Colony that it may not be able for a long time to regain its im- portance.

In modern countries where indus- trial organisation is well advanced and the population is well educated and the standard of living is more or less uniform, Income Tax, from the point of view of equity and faculty, is per- haps one of the best forms of taxa- tion. But it is noteworthy to observe in the Taxation Committee Report of 5th April 1939 that even in these mod- ern countries "incessant vigilance is necessary to prevent evasion." In Hong Kong with its peculiar econo- mic conditions and its peculiar com- position of population, the task on the part of the Administration to carry into effect such "incessant vigi- lance" may prove to be formidable and costly.

COS-

IMPACT OF WAR .. The impact of the war in Europe is beginning to tell on a large section of the Colony's manufacturing industries such as cotton goods, shirts and ain- glets, rubber wares and shoes, metics and electric torches and bat- teries, mainly due to increasing cost of imported raw materials and trans- port. Any further encumbrance which a new impost such as Income Tax may impose upon those industries may compel them to move out of the Colony. What I ask is that the Gov ernment should not make it difficult for these industries to carry on if it can possibly help it.

more

WRB

ལོ་

In the matter of Exchange Control the Government has recognised this Colony's peculiar position and quite right in applying special treat- ment to solve that problem. It therefore logical that on the question of taxation, we are entitled to similar special considerations bearing in mind that any form of taxation which would tend to drive capital and industries away from this Colony should be avoided as far as possible.

NOT SIMPLE TAX

At the present stage when full tails of the proposed Income Tax-are

WE

THAT THE

ALL AGREE

PRESENT PRICE OF PETROL IS

SHOCKING. WE MUST, THEREFORE, HAVE

OUR ENGINES AS EFFICIENT AS POSSIBLE,

AND IF YOU OWN A

MOWOG

(MORRIS - WOLSELEY - M.G)

THERE IS ONLY ONE PLACE WHICH CAN

ACCURATELY TUNE YOUR S.U. CAR-

BURETTER I.E. DODWELL & CO., LTD.,

AGENTS FOR ALL THE ABOVE ARTICLES.

TEL.: HONG KONG 23711

KOWLOON 58772.

23714

100000000000