CO129-532-1 Basis of assessment for military contributions 9-12-1930 - 29-3-1932 — Page 78

NOT INTENDED FOR COMMUNICATION TO THE COLONY,

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Memorandum by the War Office on the Claims of the Government of Hong Kong for modifications of the reverue assessable to military contribution.

I. GENERAL NOTE ON THE METHOD OF CALCULATING THE MILITARY

CONTRIBUTIONS.

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1. The military contribution of the Eastern Colonies is measured by a percentage, varying with the particular Colony of that portion of the Colony's gross revenue that is held to be assessable to contribution. This system was introduced by the Haliburton Committee of 1895. The Committee excluded from the total gross revenue of the Colonies

revenue derived from the sale of Colonial Crown Lands because the Colonies had been directed not to deal with sum s derived from land sales as ordinary revenue" and the following percentages were fixed on the basis that this item was excluded:-

Straits Settlements Hong Kong Ceylon liauritius

172

171

72

5

They explained that the lowness of the percentage

in the case of the last two Colonies was partly due to the fact that in these cases the Revenue included the gross receipts from railways. They had at one time "contemplated readjusting the revenue accounts of these Colonies, with a view of ..................... bringing (the percentage) more nearly to a level with the percentages of the Colonies which have no railways. They would have taken steps to secure the same results "whether a low

"

percentage on a large gross revenue, or a higher percentage on a net revenue is taken. "The matter, however, would be of great importance if the revenues were readjusted after the percentage were agreed upon, and therefore the Committee consider that it is better not to enter into any readjustments based on a distinction between gross and net revenue, as this might open a wide door to reclamations by the Colony after the percentage was agreed upon".

A proposal to construct a Goverment railway in the Straits, and a probable extension of the railway system in Ceylon, forced a reconsideration of this particular point, and the Committee was reassembled in 1896.

Their report of 1897 recommended that only suc) portion of the railway receipts should be included in the revenue as would, if the railway were a commercial speculation, and allowing for interest on capital expenditure, be available for the payment of dividend, subject to the following readjustment of the percentages -

That for Ceylon to be altered to

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As the Straits Settlements and Hong Kong possessed no Government railways when the percentage was fixed, the Committee did not propose to disturb the percentage in their

case.

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