CO129-586-8 War Taxation 2-2-1940 - 11-5-1940 — Page 24

24

I venture to suggest that the terms of the proposed despatch to Hong Kong are perhaps unnecessarily curt. It is perfectly true that it is no use suggesting any immediate pressure for the substitution of income tax for the existing measures of special taxation but nobody can seriously

that those measures constitute

a much less equitable and efficient machinery of taxation than an ordinary income tax and after putting the Inland Revenue Department to the trouble of examining the local legislation it seems to be a little hard to dismiss their comments as irrelevant. I think, therefore, we might at least go so far as to say that while recognising that the decision to enact the present Ordinance instead of an ordinary income tax ordinance was taken advisedly in view of local opinion on the subject, the 0.A.G. would no doubt be interested to see the definite opinion of the Inland Revenue Department as to the relative equity and effectiveness of the two measures and may wish to consider how far the defects in the present Ordinance may be capable of improvement.

I feel very much that to dismiss the matter so curtly would be taken as implying that the Secretary of State is himself lukewarm, if not definitely opposed to the idea of income tax, which is hardly in accordance with the line we have taken elsewhere in the Colonial Empire and which has recently been re-enforced in the circular telegram of the 5th June. As it now stands it seems to me that the despatch would certainly stifle any attempt there might be in the Colony to secure an improvement in the machinery.

5.

12.6.40.

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43 to Firt (38 ans)

4's To: H.Kong. 227. (47c. 38reme).

To: H Kong. 228. (35 Ama G/3.

1316

18.6.40

19.6.40.

19.6.40