CO129-586-8 War Taxation 2-2-1940 - 11-5-1940 — Page 105

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3.

The Committee refrained from making any

estimate of the revenue which was likely to be

produced under their Bill and any estimate other

than in respect of Property Tax is largely guess

work. But Mr. Caine before he left suggested a

round figure of $6,000,000 including $1,000,000

in respect of Salaries Tax and $3,000,000 in

respect of Frofits Tax from Corporations and

Businesses in addition to the calculable sum of

approximately $2,000,000 for Property Tax.

4.

The approval in principle of the

Report is being sought in the Legislative

Council meeting of 7th March and I am assured

that there will be no unofficial opposition

to that approval. This will leave the Council

free to depart from the detailed proposals of

the Committee here such action may appear

desirable, but I shall not employ the official

majority to make any radical modifications. I

realize that while the collection of Property

and Salaries Tax will present little

administrative difficulties, considerable

trouble will be experienced in differentiating

between profits made from transactions in the

Colony and other profits of local corporations and firms, and that the main difficulties will be presented by the tax on the profits of

businesses, the great majority of which are

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Chinese. I am assured that the Chinese are prepared to

contribute their share of additional taxation to assist

in Great Britain's war effort and, while I feel that every

if opportunity should be given them to prove this,

experience of the working of the Ordinance shows such expectations to be unfounded, I shall have to consider the

material amendment of the Ordinance.

5.

My proposals as to the allotment of the proceeds

of this new taxation have already be en communicated to

fou in my confidential telegram No.96 of 2nd March, 1940,

and I will address you further on the details of those

proposals in due course. The Bill authorizing the new

taxation will be introduced as early as possible but, as

is stated in that telegram, I see no reason to defer

action on the lines indicated.

I have the honour to be,

Sir,

Your most obedient, humble servant,

J.C.d. Worthwh

Governor.