CO129-615-3 Income tax 24-2-1948 - 12-8-1948 — Page 57

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OUTWARD TELEGRAM

FROM THE SECRETARY OF STATE FOR THE COLONIES

8

TO HONG KONG(Six A Granthem)

Sent 15th March, 1948. 22.00 hrs.

INFEDIVE

20.357

Confidential

Your telegram No.234. 2048/49 Balinates.

I note revente estiust30. $150 MAJZlong on bókaszvatiro buble AMA cagoulture 8148,750,000 tius aboring a small surplus. After deducting frog Revenue 10 millions arosare peleting to the current year

hovavor, there 18 A dedi216 on the year's working of 88,750,000- I feel that thic position calls for a review of the Colony's policy in regard to revenus in view of the ppegent boom sonditions (and their causes) and that the aim should be to budget for large surpluses, taus:

Reducing the pressure on loan funde

(D) dreating substantial reserves against possible leaner yearn

(0) Checking inflation

(a) Reducing any demands on .. at a time when tas resources, particularly whare oversees expenditure in concerned, are so greatly strained.

2.

Accordingly and in vier of the poor response with which I understand fleet laaue of the $50 million loan bas met and the small surplus envisaged next year even after allowing for X10 m. errears of revenus from current year, I consider all possibis measures to increase sevenuca ei1137. further including the raising the presont rate of the Earnings and Profits tax should be examined forthwith. In particular it seems desizable if possible to tax funde such as refugee capital which has hitherto escaped.

3.

I should be glad to learn as soon as possible what stepe, you consider can be taken with the above end in View.

Li..

Ia rovised revaimo estimate curent ysar S147 0. after allowing for 210 m. arrears carried forward to nezb year or is actual cash revenus estimated at $137 m.

5.

6.

That is revised seilmated expenditure current year. Grateful for further information regarding

3.2.1. profits.

Coples sent to:-

Treasury

- Mr. D.R.Serpall.