CO129-582-7 Taxation 6-6-1939 - 5-2-1940 — Page 22

I agree to the draft.

22

Broadly, I would accept the local proposals. They

have doubtless been worked out by Mr: Caine, who

has had long experience here, now knows the circum-

stances in the Colony, and is quite exceptionally

able and competent in a matter of this kind.

Income tax. I agree that we had better not say

anythings to possible permanence, one way or the

other. Income tax, once imposed, is almost invariably

found to be so useful as a revenue aid that it is

We can well afford here to

generally continued.in

wait on the event, I think. And the continuance

-and even more the extension--of social services

may not improbably prove to be a most important

element in the final decision, when the necessity for

taking that decision arrives.

The 7th: October, 1939.

You Ref. 12.

Jel. 341

9.10.39

Requests reply by

11.10.39

DESTROYED UNDER STATUTE

As Mr. Gent points out, the general policy

underlying these proposals depends on the Secretary of State's agreement to the Hong Kong Government's

proposal to devote a portion of the proceeds of the

war taxation Budget to a contribution to H.M.G. towards

the cost of the war.

I have already minuted on this proposal on

other papers which I have sent through Mr. Dave and

Sir John Shuckburgh and I do not know whether they have

vet