CO129-595-3 Proposed introduction of income tax 12-12-1946 - 26-1-1947 — Page 33

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of tax payers (other than salaried persons) seeking personal

assessment will be a deciding factər in settling what should

be the next step towards the ultimate introduction of a

normal income tax on an individual basis. If the great

majority of such taxpayers elect for personal assessment it

will be clear that the objections to normal Income Tax are

and

not very widespread/în 1948/49 it should be possible to

introduce legislation more on the lines of the kodel

Ordinance.

If no such clear indicυtion is given, however,

the rate of progress towards a pure Income Tax must

conditioned by the results of the offer in Chapter VII.

13. Murtaz.

Under the present proposals a Surtax is

imprnoticable. Surtax is essentially based on individual

incomes and until general individual assessment is in force

any attempt at imposing a Eurtax would mall only on salaried

persons and those sleating tò personal assessment. This

would obviously be unfair and would equally obviously load-fend

to defeat the object of Chapter VII by inducing those with

large incomes to refrain from aleating to personal assessment.

To attempt to place a surtax on profits over

certain figure would merely be to tax the size of a business.

To place a surtex on profits representing more than a certain

percentage on the shareholders' or proprietors' investment

would be difficult and certainly very inequitable in a

community such as Hong Kong, where the standard of business

records and accounting is still often deplorably low.

บ. Bates of Tex.

I have not suggested any a tandard rate of tax,

preferring to leave this until more is known of the 1947/48 budgeting position. But the need to bring the incidence

of taxation in Hong Kon: more into line with that of other

Colonies in the United Kingdom (bearing in mind, of course,

the/