CO129-597-2 Estimates 1949 1-3-1948 - 14-7-1949 — Page 166

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as and when opprtunity permits; and in this comʊestion I would refer in particular to paragraph 6 below.

5. In your telegram No.67; you suggest a state lottery as a simple and netgetable means of raising additional funds, and this was indeed one of the expediente which was already being disou used with the Financial secretary. In my telegrem 10,79%

of the 16th July I informed you that I could not agree to the adoption of this expedient in precent circumstances and promised to give my reasons for this decision. It is true that state lotteries are at present in operation in Melta and gibraltar, That in Malta has been in existence for many y ́ar fo That in Gibraltar was sanctioned last year on the particular ground that the inhelitants of the Colony participated largely in lotteries across the border in pain and that it was considered more desirable that the colony should benefit from this activity than a foreign country, I do not regard lotteries generally as a deuirable expedient because they are an uncertain souros of revenue and their introduction tends to encourage local populati in the belief that their financial problems have been solved without recourse to more realistio and drastic measures; moreover even though the state may take tribute from gambling sašivities in such forms as a betting tax, this does not involve, as a state lottery does, the organation of gambling by the state. I am therefore averse from sancti ning the establish ent of state lotteries except in v ry special circumstances or where it is established that no alternative method of raising necessary

revenue ex

It seems likely that in Hong Kong the most effective way of auba&antially increasing revenue ie by raising the rate of @aruångs and Profits Tax. While I appreciate the reasons why such a measure is not feasible at present, it has not been aq gested that these reasons constitute a permanent objection to suob a pescure.

on

7. It was suggested in the course of discussions with the Financial mur tery that one direction in which revenue may be Laproved is by further increasing the yield from sasussed taxes, another pessibility being more stringent legislation regarding entate duty so as to reduce evasion, both legal and illegal. the latter and on other points it might be of advantage if the Financial secretary could consult with the Board of Inland revenue and the hoard of Tras while he is in this country, and arrangement, are being made to this and (As you are ware, the Colony's Commisioner of Income Tax has already been in consultation with the board of Inland Revenus.)

I will grudeavour to secure settlement during the present financial your of the clain of the Hong Kong (overnment for over $2,000 from the or office to which you refer in

paragraph 2 of your telegram No. 677, and will give what assistance I can in regard to the claine against the Goverments of India and Burma which are referred to in the same place, and which are no doubt the claims dealt with in your despatch 10, 169 of the 17th July, 194

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Finally, I would refer to posible reductions in expo:kli ture. This was mentioned in paragraph 32 of your despatch No. 100, and I trust that reduction in the present

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rate