CO129-582-7 Taxation 6-6-1939 - 5-2-1940 — Page 84

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HONG KONG LEGISLATIVE COUNCIL.

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suggesting that those are suggestions to which they would lend any support. Furthermore, any vigour I may use in expressing the case for this measure should be interpreted not as an indication that Government is determined to carry it through against all opposition, but as

an attempt to convert opposition which is thought to be misconceived. Finally I want to show that the proposal was not brought forward without a due weighing of its consequences.

I start from the assumption which has been so fully confirmed by my honourable friends among the unofficial members that there is a general willingness and desire to contribute substantially to the revenue of the Government in order to enable the Government to lend assistance suitable to the resources of this Colony towards the prosecution of the war. I do not propose, therefore, to deal with the view expressed in some quarters, the upshot of which is that the Colony is not in a position to pay any extra taxation whatever. I cannot, however, allow to pass quite unanswered the attempt of my Honourable friend Mr. Lo to refute the statement that the Colony is lightly taxed. That statement is not intended to refer to the obvious fact that the taxation per head of population is a fraction of the taxation per head in the United Kingdom. That is inevitable because the standard of living of most of the population is so much lower. What is meant by the lightness of taxation here is a comparison between the taxes paid here and elsewhere by persons in receipt of comparable incomes. On that basis one has only to consider the various! taxes one by one; the percentage of rent paid in rates is about one-third of the average in England; tobacco, liquor and petrol duties are lower than in England or in most Colonies; in the United Kingdom there is a general tariff, a standard customs duty of 10% on all ordinary imports, in nearly all other Colonies there is a similar tariff except that the rate is more often 15% and upwards, while here there is no general tariff at all; death duties are at a lower rate here than in the United Kingdom; Hong Kong has at present no Income Tax, whereas Income Tax in the United Kingdom rises from the standard rate of 7/6 to no less than 17/- in the £ on high incomes, and income taxes at various rates have existed for many years in a number of Colonies. It has been my business for years to study Colonial finances and without burdening the Council with more figures I can confidently assert that I know of no Colony where the general level of taxation in relation to income is lower and no more than one or two where it is as lov.

It is also suggested that the level of taxation here is not low if judged in relation to social services. That argument refutes itself because if more taxes are paid naturally Government will be able to provide more social services. I have stressed that point on every occasion when discussing the financial position of the Cclony. If Hon. Members want social services they must be prepared to pay for them.

In any case my Honourable friend has not pressed his view to the point of denying that the Colony ought to raise the revenue for war