CO129-582-7 Taxation 6-6-1939 - 5-2-1940 — Page 94

Godwell

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which ?& Chen Town - win ?!

HONG KONG LEGISLATIVE COUNCIL.

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the policy, if only the Government would be businesslike in all directions. Some radical change in regard to the three disabilities I have mentioned seems essential, and would so increase the efficiency of the whole service that substantial reductions in staff and overhead would result.

With regard to this much vexed question of Income Tax, I have listened with great interest to my Unofficial colleagues' remarks, and to the very able reply of the Honourable Financial Secretary who, in spite of the disabilities surrounding the transfer of staff that I have just alluded to, has in some miraculous way arrived here, and if I may say so, is most efficiently carrying out the duties of a new broom. He is now quite rightly bent upon sweeping up part of our hard-earned incomes in order to devote them to the prosecution of the greatest of all causes, but he proposes to use a type of broom that some of us don't consider suited to the interests of the Colony.

As one of the business men originally consulted with regard to the imposition of Income Tax, I would say at once that my opposition to it did not arise until I later discovered the serious objections on the part of the Chinese community, who represent such a large proportion of our population. I was also a little misled by the fact that my Honourable friend, Mr. M. K. Lo, signed the Tax Commission's report, which, in spite of its qualifying remarks about Income Tax, I should hardly have expected him to do in face of the very decided views he now expresses.

I am at one with the Financial Secretary in repudiating the idea It has that the Colony's trade has suffered during the last two years. been

abnormally

is now quite

but prosperous,

showing very distinct signs of dwindling. During the last war, Hongkong's trade benefited rather than the reverse, but to-day there is so much Govern- ment control of imports and exports and exchange, not as much here as in other parts of the world, and so much uncertainty about the effects of the Sino-Japanese conflict, that it is impossible to form a reliable opinion about the future. In these circumstances I feel that it is an unpropitious moment to embark upon a doubtful experiment.

The Financial Secretary has alluded to the success which has attended the imposition of Income Tax in other places, and particularly mentioned the Dutch East Indies, where the Chinese are apparently paying up without demur. His reference to burglars reminds me of the well-known incident that occurred not so many years ago, of the wealthy Chinese merchant in Java who for years had been getting away with a return of 10,000 guilders a year, when his income was probably in the region of a million. The tax collection department at last in desperation raided his office and seized all his books. He promptly engaged an adept burglar, who stole the books from the collector's office and burnt them. He then sued the Government for the loss of the books and obtained damages. That, however, may be an isolated case, and in the event of Income Tax being introduced, I hope my honourablę friend will not have to resort to such drastic

measures.