CO129-615-2 Income tax 10-3-1947 - 6-2-1948 — Page 27

54307/47

KONG.

N. 4.

CONFIDENTIAL

Sir,

f.a (2/48 f.a(zl

(14/48)

Colonial Office,

The Church House,

Anid. (1) on '4F file

Great Smith Street,

3.7.1.

7 February, 1948.

26

+

I have the honour to refer to Sir Mark Young's despatch No. 123A

Confidential of 16th May 1947 enclosing copies of the Inland Revenue Ordinance

No. 20 of 1947, and to inform you that the power of disallowance will not le

exercised in respect thereof. I note with ap:reciation the steps which wo:

taken to reduce the opposition to the enactment of the above legislation and am

gratified to learn that, in the end, four of the Unofficial Members of the

Legislative Council supported the measure, and that it proved possible to bring

it into effect as from 1st A ̧ril 1947.

2. I note that opposition to the Ordinanos was lessened owing to the

adoption of a comparatively low rate of tax and high rates of personal and

children's allowances. In spite of these concessions, I observe that revenue

from this souros may reach $16 million in 1947/48, and that this factor is

estimated to result in the total revenue being sufficient to meet the total

recurrent expenditure this financial year. You will, however, doubtless bear

in mind the desirability of increasing reveme from this and other sources, in

order to meet, as far as possible, the many comitments of the Government and to

strengthen the financial position of the Colony.

3. I note from paragraph 9 of the despatch that for the reasons given

therein it was decided not to include in the Ordinance provision for taxing

income received in the Colony from aborad. In view of the many difficulties

likely to arise in the period immediately following the introduction of the

Ordinance, I do not wish to mess for any amendment at this stage. Nevertheless,

it is considered only reasonable that a person or firm resident in Hong Kong

should be taxable on the total income received in the Colony. 'You will doubtless

bear this point in mind when a suitable opportunity occurs to amend the

Ordinance. In this connection I observe that no provision is rade for the

/oxemption

?