CO129-615-2 Income tax 10-3-1947 - 6-2-1948 — Page 91

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reside in hotels.

The cost of living for all classes of the

community remains extremely high, but for the very considerable

section which is compelled to live in hotels, even the

absolute minimum costs represent a great strain on their

finances. Moreover, the special allowances designed to

assist employees in meeting the abnormally high cost of

living are included in the taxable income. It was, therefore,

considered only reasonable that these factors should be taken

into consideration in determining the rates of personal

allowances.

16.

"

In these circumstances, the committee recommended

that the personal allowance should be increased to $7,000

while that for a wife should be increased to $5,000. In

recommending these increases the committee felt that they

were also meeting, to a large extent, the representations

which had been received from the Chinese community in regard

to the inclusion of a dependant's allowance. Such an allowance

is usual elsewhere but under local conditions its inclusion

would present peculiar difficulties in view of the obligation

imposed by Chinese law and tradition for the maintenance of

dependants in addition to children. In fact, it is not an

exaggeration to say that, if a dependant's allowance were

provided for, the chances of collecting any tax at all from

large numbers of the Chinese community would be very slender

indeed. There is a good deal of feeling on this point but I

have taken the line that, as the standard rate of tax is very

moderate and as the personal allowances have been fixed at an

artificially high level, dictated by local housing conditions,

no real hardship will result if no specific relief is given. in

respect of dependants other than children.

17.

The question of children's allowances is also a

matter concerning which there has been much public criticism.

It was originally proposed that these allowances should be

limited to $2,000 each for the first and second child and

$1,000 each for the third and fourth child. In view of the