CO129-352 - Public Offices - 1908 — Page 173

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[This Document is the Property of His Britannin Majesty's Cor

REDS

C. O. 170 8370

R 4 AUG 08

CHINA TRADE,

CONFIDENTIAL.

[6790]

No. 1.

[February 27.1

SECTION 4.

Sir,

India Office to Foreign Office.-(Received February 27.)

India Office, February 26, 1908,

I AM directed by the Secretary of State for India in Council to acknowledge the receipt of your letter dated the 30th ultimo, on the subject of the taxes imposed on prepared opium in Kwangtung.

In reply I am to invite a reference to my letter dated the 11th instant, in which it was suggested that, in connection with the proposed revision of the import duty on foreign opium, the Chinese Government should be asked to define and limit the powers of the provincial Governments to levy additional taxation on the drug. Mr. Secretary Morley hopes that if the subject is thus discussed by His Majesty's Minister with the Chinese Government a solution of the present difficulties will be reached.

As Sir E. Satow attached importance to the principle that within the limits of a Treaty port foreign opium which had paid import and li-kin duty should be free from further taxation, the Chinese Government might be asked to agree to this. This would not affect the right of the provincial Governments to establish a system of shop licences within a Treaty port area for the retail of opium, native and foreign, and to levy fixed fees for the grant of the same.

As regards the interior of China, if the Chinese Government desire to retain the Treaty right to subject foreign opium at the place of consumption to any consumption tax on opium which may there be levied, it might perhaps be advisable and possible to stipulate that the tax shall not be an ad valorem one, but of the nature of a specific duty.

I am, &c. (Signed) A. GODLEY.

[2842 dd-4]

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