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Foreign Opium Duty and Surtar in lieu of Li-kin.
Sec. 4.-Foreign opium duty and present li-kin-which latter will now become a surtax in lieu of li-kin-shall remain as provided for by existing Treaties.
Duty on Native Opium.
Sec. 5-The British Government have no intention whatever of interfering with China's right to tax native opium, but it is essential to declare that, in her arrangements for levying such taxation. China will not subject other goods to taxation, delay, or stoppage.
China is free to retain at important points on the borders of each province- either on land or water-offices for collecting duty on native opium, where duties or contributions leviable shall be paid in one lump sum; which payment shall cover taxation of all kinds within that province. Each cake of opium will have a stamp affixed as evidence of duty payment. Excise officers and police may be employed in connection with these offices; but no barriers or other obstructions are to be erected, and the Excise officers or police of these offices shall not stop or molest any other kinds of goods, or collect taxes thereon.
A list of these offices shall be drawn up and communicated to the British Government for record.
Duty on Salt.
Sec. 6-Li-kin on salt is hereby abolished and the amount of said li-kin and of other taxes and contributions shall be added to the salt duty, which shall be collected at place of production or at first station after entering the province where it is to be consumed.
The Chinese Government shall be at liberty to establish salt reporting offices at which boats conveying salt which is being moved under salt passes or certificates may be required to stop for purposes of examination and to have their certificates viséď, but at such offices no li-kin or transit taxation shall be levied and no barriers or obstructions of any kind shall be erected,
Export Duties.
Sec. 7. The Chinese Government may recast the Export Tariff with specific duties as far as practicable, on a scale not exceeding 5 per cent. ad valorem; but existing export duties shall not be raised until at least six months' notice has been given.
In cases where existing export duties are above 5 per cent. they shall be reduced to not more than that rate.
An additional special surtax of one-half the export duty payable for the time being, in lieu of internal taxation and li-kin, may be levied at time of export on goods exported either to foreign countries or coastwise.
Duty on Silk.
In the case of silk, whether hand or filature reeled, the total export duty shall not exceed a specific rate equivalent to not more than 5 per cent. ad calorem." Half of this specific duty may be levied at the first Native Custom-House in the interior which the silk may pass, and in such case a certificate shall be given as provided for in Section 3, and will be accepted by the Custom-House concerned at place of export in lieu of half the export duty. Cocoons passing native Custom-Houses shall be liable to no taxation whatever. Silk not exported but consumed in China is liable to the Consumption Tax mentioned and under conditions mentioned in Section 8.
Consumption Tax on Articles of Chinese Origin not intended for Export. Sec. 8. The abolition of the li-kin system in China and the abandonment of all other kinds of internal taxation on foreign imports and on exports will diminish the revenue materially. The surtax on foreign imports and exports and on coastwise exports is intended to compensate in a measure for this loss of revenue, but there remains the loss of li-kin revenue on internal trade to be met, and it is therefore agreed that the Chinese Government are at liberty to impose a Consumption Tax on articles of Chinese origin not intended for export.
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This tax shall be levied only at places of consumption, and not on goods while in transit, and the Chinese Government solemnly undertake that the arrangements which they may make for its collection shall in no way interfere with foreign goods or with native goods for export. The fact of goods being of foreign origin shall of itself free them from all taxation, delay, or stoppage, after having passed the Custom-House.
Foreign goods which bear a similarity to native goods shall be furnished by the Custom-House, if required by the owner, with a protective certificate for each package, on payment of import duty and surtax, to prevent the risk of any dispute in the interior.
Native goods brought by junks to Open Ports, if intended for local consumption irrespective of the nationality of the owner of the goods shall be reported at the Native Custom-House only, where the Consumption Tax may be levied.
China is at liberty to fix the amount of this (Consumption) tax, which may vary according to the nature of the merchandise concerned, that is to say, according as the articles are necessaries of life or luxuries; but it shall be levied at a uniform rate on goods of the same description, no matter whether carried by junk, sailing- vessel, or steamer. As mentioned in Section 3, the Consumption Tax is not to be levied within foreign settlements or concessions.
Excise Duty on Machine-made Yarn and Cloth. Rebute on Raw Cotton. Sec. 9. An excise equivalent to double the import duty as laid down in the Protocol of 1901 is to be charged on all machine-made yarn and cloth manufactured in China, whether by foreigners at the Open Ports or by Chinese anywhere in China. A rebate of the import duty and two-thirds of the Import Surtax is to be given on raw cotton imported from foreign countries, and of all duties, including Consumption Tax, paid on Chinese raw cotton used in mills in China.
free of Export
Chinese machine-made yarn or cloth having paid excise is to Duty, Export Surtax, Coast-Trade Duty, and Consumption Tax. This Excise is to be collected through the Imperial Maritime Customs.
Other Machine-made Products of Foreign Type.
The same principle and procedure are to be applied to all other products of foreign type turned out by machinery, whether by foreigners at the Open Ports or by Chinese anywhere in China.
Non-application to Government Iron Works, Arsenals, Dockyards, &c. This stipulation is not to apply to the out-turn of the Hanyang and Ta Yeh Iron Works in Hupeh and other similar existing Government works at present exempt from taxation; or to that of Arsenals, Government Dockyards, or establishments of that nature for Government purposes which may hereafter be erected.
Supervision of Natine Customs Affairs, Consumption Tax, Salt and Native Opium Taxes, by Members of the Maritime Customs Foreign Staff.
Sec. 10-A member or members of the Imperial Maritime Customs Foreign Staff shall be selected by each of the Governors General and Governors, and appointed in consultation with the Inspector-General of Imperial Maritime Customs to each province for duty in connection with Native Customs Affairs, Consumption Tax. Salt and Native Opium Taxes. These officers shall exercise an efficient supervision of the working of these departments, and in the event of their reporting any case of abuse, illegal exaction, obstruction to the movements of goods, or other cause of complaint, the Governor-General or Governor concerned will take immediate steps to put an end to same.
Investigation in Cases of Illegal Action.
Sec. 11-Cases where illegal action as described in this article is complained of shall be promptly investigated by an officer of the Chinese Government of sufficiently high rank, in conjunction with a British officer and an officer of the Imperial Maritime Customs, each of sufficient standing; and in the event of its being found by a majority of the investigating officers that the complaint is well founded and loss has been incurred, due compensation is to be at once paid from the Surtax funds, through the Imperial Maritime Customs at the nearest open port. The High
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