CO129-491 - Public Offices - 1925 — Page 88

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to discard completely these means of raising revenue, excepting the import and export duties, inland tax, and excise as hereinafter provided for, and to abolish completely and permanently throughout the provinces and special territories of the Chinese Republic all li-kin and other transit dues, native customs duties, production taxes, weighing taxes, slaughter taxes, consumption taxes, destination taxes, octroi taxes, boat and cart and motor-car and transport, animal and conveyance taxes (excepting existing tonnage and port dues), bridge and road tolls, shop and business taxes, monopoly fees, licence fees, examination fees, protection and escort fees, school, temple, guild, and chamber of commerce taxes, and all public utility contributions levied on goods, and all other forms of internal taxation on goods and trade whatsoever; and the Chinese Government guarantees that, excepting the import and export duties, inland tax and excise above referred to, no other taxes or dues or fees of any kind shall in future be levied directly or indirectly on native or foreign goods or raw material, whether in Chinese or foreign hands, nor on their importation, exportation, purchase, transportation, sale or consumption, nor on their means of manufacture or conveyance, nor on the shops or businesses dealing therein; and it is understood that the Chinese Government will refund the amount of any taxation levied in violation of the provisions of this paragraph to the firms or individuals who may have paid such irregular taxation. The abolition of internal taxation as above provided for shall be carried completely into effect before the enforcement of the increased import and export duties and excise and inland tax hereinafter provided for.

(Note. Municipal rates and taxes and licences and possibly an income tax

should perhaps be excluded from the above under proper safeguards.)

The Governments of the other contracting Powers in return agree that China shall be free to fix her own customs tariff rates on the lines and within the limits hereinafter laid down; and they consent to the imposition of an inland tax on all goods imported into China by their nationals, the proceeds of which shall accrue to the provinces for local expenditure of a constructive nature in compensation for the loss of local revenue resulting from the abolition of internal taxation. They further agree to consider the concession of full tariff autonomy in ten years from the date of the carrying into effect of the present supplementary article if, in the opinion of a two-thirds majority of the Governments of the contracting Powers, the provisions of the present treaty and supplementary article, including the complete abolition of internal taxation, have been satisfactorily carried into effect.

The increased import and export duties and excise and inland tax provided for in the present supplementary article shall come into force within one year from the date of the signature of the protocol carrying the present supplementary article into effect on a date to be determined by the Chinese Government; but at least three months' notice of such enforcement shall be given to the Governments of the other contracting Powers.

The Chinese Government will recast the export tariff on a graduated scale not exceeding 10 per cent, ad valorem.

The Chinese Government will recast the import tariff on a graduated scale not exceeding 10 per cent. ad valorem in the case of ordinary articles, 25 per cent. ad ralorem in the case of articles of luxury as detailed in the schedule attached to article 2, and 40 per cent. ad valorem in the case of wines, beer, porter, spirits, tobacco products and narcotics.

An inland tax at a uniform rate of 5 per cent. ad valorem will be levied by the Maritime Customs Administration on all imported goods simultaneously with the import duty, and by the Excise Administration on all local manufactures simultaneously with the excise duty; excepting only wines, beer, porter, spirits, tobacco products, and narcotics, whether imported or locally produced, on which the inland tax shall continue to be levied by the Wine and Tobacco Administration as provided for and at the rate laid down in article 1.

The proceeds of the import and export duties shall constitute the customs revennes, which shall be dealt with as provided for in article 3.

The revenues from the inland tax levied on foreign imports by the Maritime Customs Administration will be lodged, less expenses of collection, in the Shanghai Office of the Bank of China, where they shall lie in a special account at the disposal of the head of the Revenue Council and the Inspector-General of Customs, who. acting on behalf of the Central Government, will distribute the proceeds pro ratâ according to the localities in which the foreign imports are consumed amongst the provinces for local expenditure of a productive nature in compensation for loss

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In the event of

of local revenue resulting from the abolition of internal taxation. any further taxation being levied, directly or indirectly, on such foreign imports, or on their transportation, sale or consumption, the amount of such taxation will be refunded, on presentation of taxation receipts or other satisfactory proof of payment, by the Maritime Customs Administration out of and up to the amount held by the said Administration on account of inland tax for the province in which such taxation is levied, and the total amount of such irregular taxation shall be deducted from the amount due on account of inland tax to the province in question. In the event of the amount of such taxation exceeding the amount due to the province concerned, reimbursement will be made by the provincial authorities, or, if the said authorities fail to do so, by the Central Government, out of other funds.

(Note.-The above is a repetition of the paragraph in article 1 regarding the disposal of the transit pass dues, which are replaced by the inland tax.) The revenues from the inland tax levied on local manufactures by the Excise Administration will be similarly dealt with mutatis mutandis and distributed by the Chinese and foreign chiefs of the Excise Administration pro raté amongst the provinces in the same way.

The revenues from the inland tax levied on locally manufactured wine and tobacco products by the Wine and Tobacco Administration will continue to be dealt with as provided for in article 1.

The revenues from the factory excise and from the excise on wine and tobacco products, and those from the stamp taxes and salt duties, will continue to be dealt with as provided for in article 6.

(Final Note. The Washington China Customs Tariff Treaty was signed by China and the United States, Belgium, the British Empire, France, Italy. Japan, the Netherlands, and Portugal. The other "Old Treaty Powers are Brazil, Denmark, Mexico, Norway, Peru, Spain. Sweden, and Switzerland. The "New Treaty Powers," namely, who cannot claim tariff privileges, are Bolivia, Chile, Germany, Persia, and Russia. The Chinese Government are also in relations of some kind with Austria. Cuba. Czechoslovakia, Poland, and Uruguay.)

Annex I.

(Referred to in Article 1.)

List of Ports open to Foreign Residence and Trade.

This list will include all existing treaty ports and trade marts (with possibly

a few exceptions in the case of certain marts opened by the Chinese in the north for political reasons in which foreign trade is not yet interested), and also certain centres such as Wanhsien, and Yunnanfu, the status of which is doubtful, and also a number of other places which might well be opened in the interests of foreign trade, e.g., Peking, Chengtu, Chengchow, Hsuchow. Pengpu, Siangtan, &c., in regard to which the British Chambers of Commerce in the various important centres would have to be consulted.

Annex II.

(Referred to in Article 2.)

Schedule of Luxury Articles.

No attempt is here made to draw up a list of luxury (i.e., non-essential) articles. But two lists are attached hereto, as being of possible assistance in a later study of this very contentious question. List No. I is a tentative list of luxury articles drawn up by the customs representative on the last Tariff Revision Commission for the preliminary consideration of the inspector-general; and List No. 2 is a "Provisional Import Tariff for German and Austrian Goods," issued by the Chinese Government in 1920 but never enforced owing to the refusal of the Treaty Powers to agree to the use of certificates of origin. These two lists, which have been obtained privately from the Inspector-General of Customs, should be regarded as strictly confidential documents.

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