CO129-582-7 Taxation 6-6-1939 - 5-2-1940 — Page 3

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circumstances, therefore, the Governor would like

the expert investigation on the possibility of

income tax in Hong Kong (which is the Committee's

main recommendation) to be conducted without too

much delay, and seeks approval in principle of the

appointment of an expert to conduct such an enquiry.

Mr Huxham of Ceylon will not now be

available, and Mr. Chambers (see 4) of the Indian

Inland Revenue Department would not be free at

least until December, 1940, and presumably the

Governor would not like to defer the investigation

for so long; furthermore, Mr. Caine suggests that

his services might prove a little too expensive for

Hong Kong. He might, however, be able to recommend

a suitable person to conduct the enquiry.

In Chapter 4 of their report the Committee

remark that strict attention to economy in

administration should precede any attempt to expand

revenue by means of additional taxation.

They

draw attention to the relatively high cost of

Government provided education, and also point out

how great are the Government's commitments with

regard to pensions. At present Hong Kong is

collecting the necessary documents and information

for an actuarial survey of their pension liabilities;

but it is perhaps worth mentioning that Sir H. Pollock

raised this question of pensions at a meeting of

the Legislative Council earlier this year, and

suggested that one way out of the difficulty would

be to raise the retiring age for Government servants.

I think it may perhaps be difficult to

find