CO129-586-8 War Taxation 2-2-1940 - 11-5-1940 — Page 89

Dear Firth,

98

13th March, 1940.

Hobinson tells me that you are the best

person to appeal for help in the following matter.

Like most other Colonies, Hong Kong

considered the adoption of Income Tax on the outbreak

of war. There was a good deal of local opposition

and eventually a compromise has been worked out by which instead of a full Income Tax, it is proposed

to have a series of special taxes on particular

kinds of income, e.g. a property tax, a salaries tax,

and a business profits tax. This is of course by

no means a satisfactory solution, for it is certain to give rise to various complications, although it

was probably the best that could be done in the

local circumstances.

The immediate point which is

causing trouble is the scope of the business profits

tax.

2. M.T. FIRTH, ES4.

The present proposal is that this should

The object

apply to "profits made in the Colony".

was to avoid complications arising out of the

taxation