CO129-591-8 Policy directives 10-3-1944 - 17-8-1944 — Page 71

SECRET

HONG KONG

CIVIL AFFAIRS POLICY DIRECTIVES

54132

Revised Draft

22/5/44

10

FINANCIAL POLICY

The general aim of financial policy will be to distribute

the burden of taxation, required for the purposes of the community,

In general, among the community according to its ability to pay. the pre-occupation financial system should be revived except as

specifically directed below.

2.

All revenue from the date of occupation should be collected in accordance with the legislation in force at the date of the enemy occupation, It is understood that the Japanese have established a series of business monopolies; these should not be maintained

permanently.

The Japanese-run lotteries should not be revived. Minor modifications in respect of licence fees made by the Japanese may be accepted at the discretion of the General Officer Commanding.

3. Import Duties. Hong Kong should remain a free port, and

import duties should be confined, as in the past, to alcoholic

liquors, motor spirit and tobacco.

4. Imperial Preference. It may be assumed that some measure

Pre-war preferences should, of Imperial rreference will be preserved. therefore, be maintained, unless and until varied at the direction of

His Majesty's Government.

5. Opium Monopoly.

The Government opium monopoly is not to

be restored.

Inland Revenue.

6.

Until consideration can be given to the

introduction of income tax, the Salary and Business Tax legislation should be revived as soon as possible as

an interim measure.

7. Expenditure. As soon as the situation permits Budgetary Control and estimates of revenue and expenditure should be re- established in accordance with colonial regulations.

Salaries. Pre-war basic scales for Government salaries

should be maintained except where specifically altered.

/9.