1939-11-17 — Page 11

THE CHINA MAIL, NOVEMBER 17, 1939

INCOME TAX DEBATE

G-O-C. AND GOVERNOR ADDRESS COUNCIL FIRMLY IN FAVOUR OF PROPOSAL

work estimate by the Taxation Com-

mittee of what might be the outcome

of a two-shilling income tax, and that

guess Included, of course, the large

"If income tax is not accepted, it will not add to the reputation of Hong Kong," declared H. E. the G.O.C., Major-General A, E, Grasett, amid offi- cial applause, at yesterday's meeting of Legis-income tax revenue to the Hong Kong lative Council.

umount which would have been trans-

ferred from the Home Government Treasury. Two shillings was regard- ed by Government as a reasonable standard rate for an income tax here,

about that the ten million figure was

should one be imposed, and so it came mentioned.

AWAIT DECISION

Major-General Grasett made one of his rare inter- ventions in Council debates to express himself strongly on the subject of income tax, which, to the end of the Unofficial contribution to the de- prompted the honourable and learn- bate, was unanimously opposed.

members

to

the

to leave the

I recognise the motive which has

Pollock, member, Sir Henry propose the very handsome sum of three million dollars as a maximum for the Colony's contribution; but, in The General pointed out that if, Britain is engaged. I say Great Brit-the absence of any real information things go wrong for Britain in the war, ain; but I have no doubt that honour-about the Colony's aggregate income Hong Kong will be one of the first to able

realise that Hong and until the means of raising Kong's future is as deeply concerned contribution have been settled, I think suffer.

as with the outcome of that struggle as it wiser at this stage Concerning the argument that Hong Kong was of strategic import- is the United Kingdom itself. I sug question of amount at the honourable ance, it was therefore justified in ask-gested that that contribution might Mr. Lo's definition, which he express- ing that the Mother Country to con- have two objectives, firstly to cover ed as follows:- tribute the major portion towards its our expenditure on local defence and defence, he declared that Hong Kong other expenditure caused by the war, was of no strategic importance what- and secondly to provide, according to soever; it was defended solely because our means, a free gift to His Majesty's Government in aid of the prosecution it was part of the British Empire.

Income tax was the fairest and most of the war against Germany. I also suggested that that gift might consist equitable form of raising revenue.

either of cash or kind or both.

INCOME TAX BEST

idea

There was in Hong Kong a section of the community which was enjoying a very high and prosperous standard of living.

The burden would fall on that por-

capable tion of the community,

of bearing it. He hoped that the Opposi- tion would carefully study the matter.

LOGICAL PROCESS

Dr. P. S. Selwyn Clark, D.M.S. de clared that increases in rates, customs, import duties, etc. would bear most heavily on those sections of the com- munity least able to bear them.

From a doctor's point of view, the way it seemed to work to him was that Government worked out the pos- sible minimum sum for food, clothing and housing, deducted allowances for etc., wife, children,

education,

In setting that

before the Council I had in mind, as I have firm- ly still, the thought that it is the duty of this Colony to help to bear the Empire's burden to the utmost of its power, even though that utmost would be, monetarily speaking, as in- significant as was the Widow's Mite; and, secondly, I considered, as I per- sonally still consider, that an income tax was the best means of collecting that contribution. As the honourable the Financial Secretary has said, when that proposal was made public

we were not without good reason for be lieving that an income tax levied for the purposes which I have mentioned would be accepted generally by the people of the Colony as appropriate

and from the resultant sum at this juncture.

asked

for

a

contribution

I could not, if I would, add any- for the purpose of maintaining or ex-thing of value to the masterly reply tending essential defences, civil ad- which the honourable Mr. Caine has ministration and military and essen- made to the principal objections which tial services.

have been raised to the introduction of income tax: he has shewn that some of the apprehensions which the announcement of Government's pro- posals has roused have been unduly magnifled and that others have no foundation in fact.

He reminded listeners that in 1938, when it was proposed to make Canton an Infected port because of smallpox and to carry out compulsory vaccination, there was the same opposition as there the now to Income tax; same question of invasion of pri- both vacy was raised. Yet measures were entirely successful. He was sure Hong Kong would ac- cept income tax with that great spirit it had shown in the past.

was

THE GOVERNOR'S

SPEECH

I feel quite sure that most, 17 · not all, of the opposing arguments adduced here have found volce In every country where Income tax has been mooted,

So far as administrative difficulties are concerned, I have it on the autho- rity of the Secretary of State that we should not be deterred by fears on that ground, for experience has shewn in many Colonies that these can be suc- cessfully overcome; and it may be of interest to members to know that, apart from the Dominions, income tax is already part of the financial struc- have beenture of fifteen British Colonies, while several others contemplate its intro- duction.

His Excellency the Governor, wind- ing up, said:--

THE AMOUNT

All the main points relative to the 1940-41 estimates which raised on the unofficial side of the Council during the two days of de- bate have been answered and in my opinion answered adequately. I have, But although I do not propose to add therefore, nothing to add to those ans to or to reiterate the points made by wers but I will renew the undertak- the honourable the Financial Secre- ing given by the honourable gentle-tary, there are one or two aspects of man, the Financial Secretary, on Oct- the matter on which I have a word to amount that ober 12th by reiterating that Govern- say. Firstly as to the ment, in putting into effect the ap-the Colony should contribute, for I proval given by you to those estimates, note that every member here supports will keep a close watch upon the in one degree or another the making revenue and will govern its expendi- of such a contribution. In this con- ture both on public works and in nection I wish to dispose of an ap- delusion that respect of the filling of new appoint-parently widespread ments in accordance with the financial Government has determined to raise a outlook from time to time.

war budget revenue of $10,000,000 The subject which has occupied per annum or of any other pre-de- almost the whole of the debate, how-termined sum. No such statement -ever, is not reflected in the estimates. has ever been made by a Government On October 12th in my address I officer; presumably the error took its outlined to the Council a proposal for rise from too hasty a reading of a few a war-budget, on the expenditure side paragraphs of the honourable the Fin- of which the largest item would be ancial Secretary's speech in this Coun-

"As we are all agreed that the Colony should make the best con- tribution of which it is capable, the problem confronting this Council resolves itself to one of finding the best means of raising the money."

WAR'S GRIM HUMOUR

Field-Marshal

London, To-day.

Goering's factories are to help shoot down Field-Marshal Goer- ing's air force!

A British Arm which used to make gramophones and wireless sets plan- ned shortly before war started to make predictors used for getting the range for anti-aircraft guns.

Special machinery was required and the search eventually led to

German factories for this machinery, which is now manufacturing the pre- dictors which will be used by Bri- tain's anti-aircraft defences.-Reuter.

and

responsible bodies outside the Council should have been ready to express themselves so de- finitely on this very complex ques- tion of Income tax not only in the face of the findings of an export committee but even without wait. ing to see the Government's actual proposals in detall or hearing any exposition of the case. However, that exposition has now master of his subject; and been given, and given by one who is there is issue at the present time, so no boats more over, no vote to be cast on the have been burned as yet.

I have said that I would not go over the ground trodden by the honourable the Financial Secretary and I do not wish to elaborate the case for income tax to-day: but I wish to make two or three points in connection with the proposals outlied by myself on Octo- ber 12th. The first I have made al-

a

be

While on this subject I would ob-ready. What Government has in con- serve that there has been an assump-templation is a free gift to His Majes tion in several quarters that Govern life and death struggle: it would

ty's Government while engaged in ment's intention has been that Hong utterly illogical, to say that least of it, Kong's contribution to His Majesty's to describe as free a gift wrung from Government would necessarily take

an unwilling community by the use of the form of a monetary gift sent from the official majority in this Council: no here to London. Such is not the case

such thought has ever entered my and I take such blame as the false

mind. impression deserves for not being more specific in my first utterance on subject. Rather, what I had in mind

the

TAXATION COMMITTEE'S REPORT Doubt has been thrown this after- noon upon the actual conclusion to ap-which the Taxation Committee came in respect of income tax. After de- tailing the arguments against and for such a measure they reported as fol- lows:-

and similar suggestions have peared in the local press-was the construction at our expense and in our yards of vessels for the Royal Navy, such as mine-sweepers, one or two of which would make a very valuable

here addition to our defences

and others, no doubt, could usefully be employed elsewhere: alternatively, our contribution might be towards the Royal Air Force.

COMPLEX QUESTION Secondly, as to the method of taining funds for our purpose.

Our conclusion is that the advantage of an efficiently administered income tax over other forms are overwhelm- Ing from the point of view of equity, and that, if it be considered that the tax is capable of successful adminis- tration in the Colony, it should be im- ob-posed as soon as additional revenue on a substantial scale becomes a neces- sity. In view, however, of the un-

(Continued on Page 17)

I'frankly confess to surprise that so many members of this Council

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