Enclosure No
4.
376
HONG KONG.
Memorandum on the Financial Position
1931, 1932 & 1933
by the Colonial Treasurer.
1931.
1. The revenue for the year amounted to $33,146,723 as against the original estimate of $27,488,759, an increase of $5,657,964. The revenue was well maintained all round, increases being shown against each lead as compared with the original estimate.
2. In view of the fall in the value of the dollar from 1s/4d, on which the estimates were prepared in September, 1930, to approximately 1s/- in January (the lowest figure actually touched was 102d, on 14th February), it was essential, besides reducing expendi- ture, to raise additional revenue. A full list of these alterations and additions is given on pages 5 to 11 of the "Report on the Finance for the year 1931". The most important increases were made on the following items-Opium prices, Liquor and Tobacco duties during February, and Postal Rates in April. Further alterations were made in Liquor and Tobacco duties in September, whilst at the same time the import duty on Motor Spirit was raised from 15 cents to 25 cents per galion and a new duty imposed on Perfumed and Medicated Spirits of $10 per gallon. The additions imposed in September were made with a view to the balancing of the 1932 budget, but had to be put in force immediately in order to safeguard the revenue.
3. Land Sales (Premia on New Leases) produced the large amount of $3,177,807 against an estimate of $1,500,000, and is almost up to the record year of 1923 when $3,488,797 was collected. It is satisfactory also to record that the revenue from the Kowloon Canton Railway continues to increase steadily.
4. The expenditure for the year amounted to $31,160,774 as against an estimate of $29,787,855, an increase of $1,372,919. The estimates were based on $1=1s./4d., but the opening rate of the year was 1s./04d, and the average rate for the first nine months of the year was just under 1s./-. Expenditure, therefore, was immediately reduced and restricted to essential services. During the last three months of the year after England's departure from the gold standard the dollar rose, the average rate for the quarter being almost 1s./4d., and Government partially raised the restriction for special services. Several large votes were taken during the year for unforeseen expendi- ture, but notwithstanding these the savings on the many subheads under "Other Charges" throughout the Estimates, together with the saving on Personal Emoluments of over $1,000,000 by paying sterling salaries half at 1s./6d. and half at Treasury rate, and the curtailment of extraordinary works had the effect of counteracting the fall of the dollar and reduced the net over-expenditure to $1,372,919. The result of the above is that Revenue exceeded Expenditure by $1,985,950, and the year 1931 closed with an excess of Assets over Liabilities of $11,347,629.
1932.
5. The revenue for the year was estimated at $33,991,510 and included the additional taxation, referred to in paragraph 2, imposed in September, 1931, estimated to yield $2,190,000 in a full year. Actually this will not be achieved owing to the rise in the dollar as the liquor and tobacco duties were reckoned on the basis of $1=1s./-. So far, however, there has not been any falling off in the quantities of these articles imported. The new tax on perfumed spirits, medicated spirits and toilet preparations of $10 per gallon was found to act inequitably, and on the 17th March the duty was altered as follows:---
per gallon.
On perfumed spirits and toilet preparations other than spirituous liquors classified
by the Superintendent as Medicated Spirits
$10.00
On Medicated spirits classified by the Superintendent as such-
(a) containing more than 10% by weight of pure alcohol but less than 21%. (b) containing 21% by weight of pure alcohol but less than 38% (c) containing 38% by weight of pure alcohol but less than 63% (d) containing not less than 63% by weight of pure alcohol
2.50
5.00
7.50
10.00
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