HONG KONG LEGISLATIVE COUNCIL
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Hong Kong is a free port dependent for its existence on its transit trade and to survive it is necessary for it to be in a position to provide cheap services. While we agree in principle that direct taxation should be imposed it is, in our view, imperative that the standard rate should be low and that it should not exceed 10%. We consider, however, that the Bill which has recently been published requires much more detailed examination than has so far been possible. Our own business interests make heavy demands on our time and we do not feel that we will be able to give the Bill the extensive study it requires in time for it to be introduced during the present financial year. It is our considered opinion, therefore, that the Bill should be referred to a Com- mittee for further examination and that its enactment should be deferred so that it does not come into operation until the 1st April, 1948, which we understand is the date on which Income Tax will be brought into force in Singapore and Malaya."
These, Sir, are still my views and my objections to the present Bill fall broadly under two heads. The first, for the want of a better name, I will call "Constitutional" and the second "Administrative.”
As to the first, my objection is to the speed with which this measure is being 'rail-roaded' through this Council. The present Bill is barely a week old and I must admit I have not been able to give it the close study I should have liked.
We are told the Colony needs further revenue to meet, inter alia, an as yet undisclosed liability to the Imperial Government. I submit, Sir, that if this Council and the Colony knew precisely what that liability was, and accepted it, this method of raising revenue to meet it would have been more palatable than it seems to be.
It was primarily for this reason that I advocated a delay until 1st April, 1948, before bringing this measure into operation.
As to my objections that fall under the second head, "Admini- strative", these are more fundamental. I have, on previous occasions, expressed the view that I doubted whether direct taxation could be applied with the same degree of equity in a place like Hong Kong .as it is in the United Kingdom. I still have these doubts, and they are based on two immutable factors. The first is the complexities of Chinese businesses and the multiplicity of names for one Chinese individual, and the second is the danger of malpractices that are inherent in a measure of this sort. I will not elaborate on these two factors, but they are inter-related.
The degree of importance that can be attached to these admini- strative objections varies of course with individual views.
In my opinion they stand high but as yet not high enough for me to oppose the principle that direct taxation should be tried through the medium of this amended Bill. I regard it as an experiment.
I do not con- sider the Bill as now re-drafted will have any prejudicial effects on
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