Extract from the
17th
CHINA MAIL
January,
1941.
236
THE BUDGET
The Hon. Mr. H. R. But- ters yesterday introduced Hong Kong to the Budget proposals for 1941-42 with a notable brevity. It will take much longer for the community to attune its ideas to the scale of ex- penditure contemplated,| and if we know our com- munity, still longer to de- velop that frame of mind which, in England, en- abled the taxpayer to greet a colossal burden of war taxation with the complaint that the Chan- cellor of the Exchequer had not gone far enough!
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Nevertheless, judged on the basis of a brief survey of the proposals-time prohibiting a more detail- ed study for the moment -it is a good budget. is good from the viewpoint that, despite the exceed- ingly heavy commitments under the heading of spe- cial war expenditure, the impulse to cheesepare elsewhere to the detriment of the Colony's welfare and well-being and pro- gress, has been resisted. It is good because the addi- tional taxation contem- plated falls largely upon that section of the com- munity which can most easily afford to bear it, because it brings home vividly-some may think drastically-that there is a war on in which Hong Kong has an intimate in- terest, and because, in or- der to seek ways and means to meet the large deficit, Government in- tends to re-open the ques- tion of War Taxation.
The compromise taxes introduced just before the departure of Mr. Sydney Caine have produced much greater revenue than was expected. They have, on the whole, work- ed very smoothly; the pro- cess of collection has not been complicated by un- expected or insuperable obstacles. But in no sense can it be suggested that they are satisfactory. The opinion expressed by the Committee set up in Singapore to study war revenue problems, con- demning the Hong Kong compromise taxes out of hand as grossly inequit- able, merely gave point to the views of Government during the income tax controversy.
Mr. Butters suggested three alternative ways of meeting the needs of the financial situation. First, to perpetuate and em- phasise the existing ine- quities by increasing the existing rates, second, to amend radically the forms of taxation in order to spread the incidence more fairly, and third, to revert to proper income tax.
Actually, there seems no such choice. The third course is the only one of- fering reasonable guaran- tees against further dis- criminatory treatment. And as practical exper- ience of the modified taxes has destroyed some of the main arguments against the wider and fairer mea- sure, the issue can be re- vived without any show of reluctance.
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