CO129-586-12 War Taxation- royalties from public utility companies 25-4-1940 - 17-6-1940 — Page 7

AD:MGE

CONFIDENTIAL

کر سم

DROIT

Colonial Secretary's Office.

Dương Phong.

25th April, 1940.

Dear Caine,

In connection with the recommendations

in your Taxation Committee's report regarding royalties

from Hong Kong public utility companies, you are no

doubt already aware that the arrangements with the

Telephone Company have now been incorporated in an

amending Ordinance. The Gas and Electricity Companies,

however, present more difficulty as, with the exception

of the China Light, they show little inclination to

negotiate and the large increase in the cost of coal

has given them a handle to threaten increased charges

to the consumer so that I am afraid the imposition of a

royalty would be an opportunity for laying any such

increase at the door of Government.

Though the times are therefore not

It

propitious I hope to be able to go on with the matter

and I have written to Shanghai for details of the

royalties paid to the Shanghai Municipal Council.

would be of assistance if you would be so good as to

let me know whether there is any Colonial legislation

regarding the imposition of royalties on existing public

utility companies.

One point of importance is the question of

domicile of the company and residence of the directors. As you are aware that was one of the problems which

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confronted Government in connection with the old

Telephone Company before the creation of the existing

Hong Kong Telephone Company in 1925, the Telephone Ordinance making provision accordingly. The Hong Kong and China Gas Company resembles the old Telephone Company in possessing an expensive London directorate.

I am asking for information on these

points so that we may know beforehand what can be

done by legislation in the event of any companies

refusing to negotiate or of such negotiations failing..

Yours sincerely,

S. Caine, Esq.,

Colonial Office,

LONDON.