CO129-615-2 Income tax 10-3-1947 - 6-2-1948 — Page 56

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HONG KONG LEGISLATIVE COUNCIL

I submit, Sir, that the provisions of this Bill, drafted in the spirit of the 1939 Ordinance, namely, the production of a relatively simple measure freed of many complications inherent in a full income tax legislation, with the fundamental essentials of a low rate, and without any provisions which would harm the economy of the Colony as an entrepot, is a substantial improvement on the pre-war legislation.

It is true that in 1939 there was an overwhelming desire on the part of the community that the Colony should assume its share of the financial burden of the war effort. But this Council, in 1940, was absolutely unfettered, not only in theory but in fact, in regard to the means by which the requisite war revenue, a substantial amount of which was to be devoted as a free gift to H.M. Government, was to be found. His Excellency Sir Geoffry Northcote had categorically stated-

What Government has in contemplation is a free gift to H.M. Government while engaged in a life and death struggle; it would be utterly illogical, to say the least of it, to describe as free a gift wrung from an unwilling community by the use of the official majority in this Council: no such thought has ever entered my mind." (16th November, 1939, Hansard page 228).

In point of fact the method of raising the war revenue required, which was acceptable to all the members of this Council in 1940, was that prescribed by Ordinance No. 13 of 1940, on which the present Bill in its fundamental essentials is based. Therefore the crucial question before this Council, as it seems to me, is as to whether or not it is really necessary to raise further substantial revenue. And I venture to think that any doubt which might have existed on this point must have been completely dissipated by Your Excellency's address to this Council last week.

Sir, I cannot pretend that the introduction of a direct tax in peace. time in the Colony has come upon me as a surprise. To me certain observations of His Excellency Sir Geoffry Northcote, in the course of his address to this Council on the 16th November, 1939 were a significant warning. May I quote these observations:

Lastly, in order that I should be completely frank on the subject, I admit my belief that the principal contribution to the peace-time-I repeat, peace-time-revenue of this Colony should come from an Income Tax. Trivial arguments can be ranged against its equitability in a community composed of different races with different standards of living: but these arguments have little. weight when opposed to the undeniable basic equity of a tax which is assessed in accordance with ability to pay. More than one Unofficial Member has reminded me during the Debate of the shortcomings of this Colony's Administration. I fully, though with deep regret, agree that in primary education, in facilities for poor and sick children, in housing of the poorer classes, in town.

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