CO129-440 - Others & Individuals - 1916 — Page 27

T

Address reply to "The Secretary, General Post Office,"

quoting Registered No64000/16

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26

GENERAL POST OFFICE, LONDON.

0.0.

59954

3 December 1916.

IRECT (REGE 14 DEC 15

Sir,

With reference to your letter of the 9th of November last, No 2887/1916, concerning the staff of the British Post Office Agencies in China, I am directed by the Postmaster General to acquaint you, for the information of the Secretary of State for the Colonies, that serious difficulties arcse on the transfer of the Post Office Agencies in China to the Imperial liability through the circumstance that the salaries of the staff were held to have become liable to Imperial Income Tax, which was not formerly the case. In effect

those officers whose salaries became liable to tax were faced

with a reduction in salary, in some cases of considerable

amount. This Office ascertained that the Board of Inland

Revenue had no power to forgo the tax so long as the salaries

were paid direct out of Imperial funds; and the deductions

for tax cannot satisfactorily be met by an increase of pay. If the salaries were paid through Hong Kong funds as suggested in the original proposal made by this Office, the scales of pay at the Agencies could be kept in exact correspondence with what they were before the transfer, or with the existing scales at Hong Kong; and the Postmaster General would be glad if the original proposal could be accepted without the modifications proposed by the Governor of Hong Kong.

It is desirable that the matter should be settled before

The Under Secretary of State,

the

COLONIAL OFFICE.