CO129-577-1 Estimates- effect of war on colonial estimates 15-9-1939 - 4-10-1939 — Page 14

46 While I appreciate that in many territories it would

be inequitable and undesirable to increase the rates of direct

taxation at present payable by the mass of the people, 1 am

of opinion that the two following possibilities should be

examined: ~

(a) That taxation paid by wealthier members of the

community might be increased, Imposition of income tax or

increase of it if it already exists would probably be the

most scientific way of securing this and I hope that if it is

at all practicable you will not be unduly deterred by

administrative difficulties from imposing such taxation.

Falling income tax some other form of direct taxation is i

suggest indicated as being ea-lest means of ensuring that

taxation is paid by tote the can beat bear the burden.

That on general grounds 18 is very desirable that

some arrangement should be made to ensure that Governments

obtain an adequate share of any excess profits accruing as the

result of war, I suggest that whether or no prices are in

fact already showing tendawy to race it will be desirable to

pass legislation on the subject without delay : As regards

profits from exports it may be found that only practicable

method of achieving object is some form of export duty bered

on the excess of war-time prices and quantities of over pro-

var prices and quantities.

5.M As regarde local trade problem of excess profits

will not arise if as I hope action is taken to prevent

profiteering. If as may be the case (see paragraph 1(b)

above) there is a shortage of imports and an accumulation of

funds locally, there will probably be a marked rise in margia

betveer c.i.f. price of imports

and their retall price as well as in the prices of

local produce. I have indeed already had indications fron

some

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