CO129-591-7 Estimates for 1946-1947 12-12-1945 - 14-3-1947 — Page 145

considered separately.

4. No provision is made for any contribution

towards the cost of Military Administration.

This

will have to be considered separately. It is hoped

that the War Office will agree to bear the cost of

the Military Administration for the month of April,

1946 but this matter is still the subject of

correspondence.

5. It is appreciated that there may be little scope for

reduction in expenditure in view of the urgent need for

rehabilitation. It will accordingly be necessary to

consider to what extent (a) revenue can be increased;

(b) expenditure can be financed by means of loans.

6. Increase in revenue. It is necessary that the

revenue should be increased to the greatest possible

extent not only in order to achieve financial solvency

but also to combat inflation:

(a) Income Tax. It should be the firm policy of

the Government to introduce a full income tax system

as soon as staff is available following the general

development which has taken place in other Colonias

in recent years. Pending that introduction, interim

measures on the lines of the combined system of war

taxes, i.e., property tax, salaries tax, profits tax,

and loan and mortgage interest tax, should be adopted

without delay. You will no doubt consider whether any

variations in rates or otherwise should be made from

the rates and allowances under those war taxes.

(b) Consideration should also be given to the possibility

of increasing the duties on liquor and on tobacco, both

of which duties have proved to be great sources of

revenue in the U.K. Additional duties on luxury goods

should be considered and also every other possible source

of revenue.

(c) Subject to local considerations, the general scale

of taxation should be raised to compare with that in