CO129-482 - Public Offices - 1923 — Page 447

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amount payable by the various Companies was greatly

in excess of any monies which would be received by the

Colony by way of stamp duties on transfers, estate duty

or probate duty if the company were a Hong Kong Company; and it was further submitted that owing to the whole

of the Company's operations being in China they obtained no benefit from being registered in Hong Kong.

(4) It was submitted that though it was necessary for the Companies Registration Department, Hong Kong, to receive sufficient monies in fees, etc., to provide for

ite expenses yet as the additional cost of the Registry

at Shanghai was only 3,000 dollars a very much smaller fee than that of 4 cents per 100 dollare would amply suffice to meet expenace.

(5) The Dilectors asked that representations should

be made to the Hong Kong Government with a view to

getting a reduction in there taxes and they expressed

the view that no tax should be levied on the capital of

the Company in excess of 5,000,000 dollars.

In 20236/23 the Governor of Hong Kong after receiving from us a copy of the Company's letter outlined above sent us a copy of a despatch which he had sent to H.M.Minister at Peking. As expressed in that despatch

the Governor's view 28

-:

(Lindence)

(1) That there was no support either from figures

or calculations that the B.A.T.Company's suggestion that

the fee imposed under the Hong Kong Ordinance was too

high. If it were shown to be too high he would be

prepared to consider a reduction.

(2) He would be prepared to consider making some

arrangement

arrangement to avoid the duplication of taxation of which the Company complain. He suggested that the simplest wey might be to charge the fee only on the capital of the B.A.T.Co.(China) Ltd.

(3) If in their letter the Company intended to suggest that the total amount of the licence fee collected from China Companies should be only sufficient to pay the cost of the Registry at Shanghai he thought this was wrong as in his opinion the fee was intended to compensate the Colony for their loss of estate duty and transfer duty and he pointed out that it was important to remember that shares in China Companies, according to his informa- tion, paid no estate duty to any British authority except where they formed part of the estate of a deceased British subject.

(4) He could not accept the Company'e suggetion that no fee should be levied on any capital in excess of 5,000,000 dollars. He wrote that it might have been sound if the fee had been imposed to pay the expenses

of a Registry, but that the proposal was quite inappropriate to the case of a fee which had been imposed in lieu of estate en transfer duty.

aust

(5) He concluded that as the whole question of

the licence fee wae at the moment under consideration and

as the tax had now been in operation for 7 years he would be prepared to reconeider the amount of the contribution to the Shanghai Registry if adequate reasons could be shown for increasing it.

We have now received from the Foreign Office

the observations of H.M.Minister, Peking, on the

Governor's

: