Increased Duties
of
"So much for the expenditure es- timates in the ordinary budget, which will be more fully explained by the Honourable the Financial Secretary in his speech this afternoon and in the memorandum prepared by him. On the Revenue side there are con- siderable alterations to be made, but these do not appear in the printed volume. The most important them are the increases in duties on petrol and alcoholic liquors which have a dual purpose, viz., to raise more revenue and to effectuate the policy of conserving sterling ex- change: the others implement certain recommendations of the Taxation Committee and I will leave it to my Honourable friend to state their nature.
"The estimated
financial outcome of what I have called the ordinary budget is a small surplus. That ex- pectation is due partly to the addi- tional revenue from the sources just mentioned and partly to the transfer of certain appropriate expenses to the defence budget. If, however, during the fifteen month period which the estimates cover it appears that a deficit is probable it should not be difficult to curtail expenditure, and especially capital expenditure, suf- ficiently to avoid that result.
Income Tax Proposed
"I come now to the defence budget, by means of which Hongkong will make its contribution towards the prosecution of the war against Ger- many. That contribution may take one of two forms, the first being the meeting from our own pockets of such additional local expenditure as the situation may demand for volunteer naval, military and air defences and other war services; the other, free gifts in cash or in kind to His Majesty's Government towards its aim viz. the defeat of the enemy.
"The former of these has its natural limitations and not wide ones at that: but trust that not only every member of this House but also every citizen of this Colony will agree that there should be no limit upon the aid that we should give to His Majesty's Government other than our ultimate ability to pay. Quite obviously in this lightly taxed com- munity that limit lies at a great dis- tance and could not be reached through existing revenue channels.
"It is therefore necessary to create new means and Government has de- cided that an Income Tax is by far the most suitable. Steps will therefore be taken at once to draft the neces- sary legislation and to bring into being the necessary machinery. My hope is that within six months that machinery will be at work. Plans are not far enough advanced as yet for any detailed description, but in order to prevent unnecessary alarm I will say that it is not intended at the initial stage to prescribe very high rates of tax.
"Attention has also been given to the question of taxing Excess Profits. There may plainly be justification for such a measure in due course, but I feel-and I know that
my Honourable friend agrees with me- that we had better tackle the Income Tax problem first and, when that has been done, take up again the matter of Excess Profits Duty.
2,
Two-Fold Duty
"Hon. Members, This address is, of course, intended to do no more than outline the principles in accordance with which this Colony's financial policy for the near future is being framed and the Honourable the Financial Secretary will, this after- noon, explain the Government's pro- posals in ampler measure. I have tried to put before you the twofold duty which rests upon this Legisla- ture at this juncture.
"On the one hand we are res- ponsible for the proper care, a phrase which includes improve- ment, of this small but import- ant part of His Majesty's Empire and it is especially incumbent upon us to maintain and, as far as we can extend, the Colony's social services, particu- larly public health and education: you will find increased provision in the ordinary budget under both those heads.
1
"On the other hand it is our duty as well as in our interest to give ali that we can to help His Majesty's Government in the great struggle in which the Empire is engaged. The task of this Government is to find the right balance between these two duties and I confidently hope that you will find yourselves able to en-
dorse the proposals that are about to come before you.
now
"I do not wish to be thought to make light of the burden which they will lay upon the shoulders of the taxpayers of Hongkong. The In- come Tax, even at the relatively low basic rate of two shillings in the pound, must inevitably give a shock to the social and commercial struc- tures of the Colony, and considerable adjustment will be necessary in or- der to absorb that shock. Neverthe- less I am fully confident that they will no more shirk their duty where their money is concerned than they have in offering their services, and if necessary
their lives, in Britain's cause."
46
No comments yet.
Private notes are available after approval.