BUDGET DEBATE SUPPLEMENT
Hongkong Daily Press.
Registered as a Newspaper at the General 報西 ESTABLISHED 1857
Post Office in the United Kingdom,
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15-19 Marina House, Queen's Road Centrai G.P.D. B. No 1.
HONGKONG, FRIDAY, NOVEMBER 10. 1939.
UNEQUIVOCAL
INCOME
SIR HENRY POLLOCK:
TAX
OPPOSES MORTGAGING
COLONY'S FUTURE
1.
FINANCIAL INDEFINITELY ·
The Hon, Sir Henry Pollock, Senior Unofficial Member, said:— Your Excellency, I have no comments to make on the Budget for 1940-41. In regard to the proposed War Gift to the Imperial Gov- ernment, as à résident of the Colonx for 51 years, during 29 years. of which time I have served as a Member of this Council, I make no apology for treating the making of this gift from the point of view of the welfare of this Colony rather than from the point of view of contributing what must, whatever actual annual sum in dollars is remitted to the Imperial Government, be a mere mite in the War Expenditure of Great Britain.
in
३.
OPPOSITION FOR
TO
HONGKONG
Imposition of income tax would be a disastrous form of taxation to adopt, for it is the unanimous opinion of the Committee of the Hongkong General "Chamber of Commerce, and of the Committee and Members of the Chinese Chamber of Commerce, that they are not in favour of the institu- tion of income tax in this Colony, My Unofficial colleagues on this Council are unanimously opposed to income tax.
CHINESE MENTALITY
course of your two years' ad- ministration of this Colony. has earned the thoroughly well-deserved reputation of being able to consider every side of a question, will, with the same impartiality, consider the arguments which are now being urged against the im- position of income tax, to- gether with the suggestion that alternative taxes be im posed.
Your Excellency recently ap- pointed a Committee to go into detalls of the Income Tax Bill
I. confess that I find it very difficult to understand what just- fication the Government has for proposed by Government, and I proceeding with the consideration understand that, in that letter of of an income tax bill In view of
appointment, it was stated that Government was "willing to give the fact that those British and
full consideration to alternative methods of raising revenue."
the Government, that that remark does not mean that the members
I
In taking this view I am sup-originally been desired to include Chinese experts have unanimously ported by the Right Honourable were deleted in order to avoid expressed themselves as being op have been infornted, however, by the Secretary vot State for the budgeting for any substantial de-posed to Income Tax. Colonies who clearly, and wisely, felt told us that "there should be as Hittle disturbance as possible with the Colony's current activities and development schemes, so long as revenue to finance them would be forthcoming."
H
the uncertain cir-
Anybody who understands the cumstances which lie before us." mentality of the Chinese must
STRONG ARGUMENT realise that such a measure as in- of that particular Committee are.. That statement of the Financial come tax would be likely to cause to be at liberty to suggest any al-
ternative methods of taxation. Secretary 1 regard as an im-the fight of capital, from this
Accordingly. I venture to sug- portant admission that certain Colony and to prevent new remit- desirable items of expenditure tances from being made to Hong-gest that Your Excellency should
also It is our duty, therefore, in this
now appoint a Committee for the that it would were excluded from the Budget "kong and Council. In considering the amount because of the "uncertain cir- probably deter new factories and purpose of considering alternative methods to income tax for raising of dollars to be remitted to the cumstances which lle before us." enterprises from starting here. Imperial Government as a gift, to and nobody who
revenue for the War Gift to the is acquainted· look ahead beyond the immediate with the circumstances of Hong-
Imperial Government. On that Committee should be glad, if present, and to conserve our re- kong will dispute that there are
considered, eligible, to serve. sources for "current activities and development schemes."
many other public works which we would like to have carried out if finances permitted. This seems to me a very strong argument not only against our sending home as a War Gift" a sum of more than
In connection with this lat- ter point I may mention that I have been informed recently that certain Chinese, who had intended to start steelworks in this Colony, have, since, in- come tax was mooted, aban- doned the idea.
ALTERNATIVE METHODS I am convinced that it would
That Committee would no doubt not be prudent finance to make an
be able to recommend many sult. able alternatives to income tax. In annual contribution to the Im
the meanwhile I suggest some perial Government of a larger
Other objections to income tax possible alternative methods of sum than $3,000,000, in addition to
are that it would involve the taxation, which have the merit of the $6,000,000, per annum which argüment against the imposition trouble and expense of having being easily collected, at small ex- we have to pay for our ordinary of a tax like income tax, which numerous Chinese account books pense, and also of being widely Military Contribution and to the will seriously upset Chinese capi- translated into English, and that spread, such as:-
talists and industrialists in this its collection would involve the Colony.
employment, at considerable pub-
sum of nearly $2,250,000 in respect of Defence and Special War Ex- penditure for "1940-41.
"
MORTGAGING FUTURE
My reasons for holding this opinion are:-
(1) That nobody can foretell how long the present war will last, and, therefore, that we are not Justified in mortgaging our finan- cial future for an indefinite period of time by sending out of the Colony annually more than $3.- 000,000.
(2) That the total amount re- quired to be voted eventually to complete the following items in Public Works Extraordinary for 1940-41, namely, items 11, 14, 15, 19, 21, 22 and 23, is over $3,300,000 whereas the amounts now being voted for commencing those works total no more than $215,000.
The big difference between the above amounts will have to be made up by the tax- payer in future. Budgets unless" we are to leave those works in a state of suspended anima- tion for the wholly unknown and uncertain duration of the war.
$3.000.000 but also a very strong
A few days ago I visited the lie cost, of a large staff of new. Kwong. Wah Hospital and found Government' officials, and that the that it was badly overcrowded, Chinese have strong objections to with, in some cases, two patients their private, family, and business occupying the same bed. Also I affairs being pried into, found over 200 patients quartered ADMINISTRATION COST in four matsheds in the grounds, In the Taxation Committee's "who are exposed to serious dan-
ger in case of fire,
Report, mention is made of the
to have
In these circumstances it is probable cost to Government of obvious that more hospital ac-administration of income tax, but commodation for several hun- no consideration seems dred patients ought to be built been given to the additional cost as soon as possible, involving a of book-keeping, records, legal chartered accountant's probable expenditure of about advice. two million dollars.
fees, etc., that will have to be
I am confident that Your Ex-borne by any business in order to cellency, who has Public Health comply with the requirements of matters in this Colony so much the Tax. at heart, will agree that this is a responsibility which rests upon the Government and that these new hospital buildings ought to be erected as soon as possible. I now pass on to the main theme of my speech, which is that, for the purpose of mak-. ing a gift to the Imperial Gov- ernment, other taxes- which would not involve the risk of injuring the trade andy prosperity of this Colony ought to be substituted for in- come tax.
(3) In his speech in this Coun ell on the Budget, on October 12, the Honourable the Financial Secretary said:-"In preparing the final draft a number of items of In the opinion of responsible new expenditure, which it had business men of this Colony the
A percentage on every elec- tric light and power bill.
A percentage on every gas bill.
A percentage on every tele- phone bill.
The "raising of the annusi licence fee charged for wire- less seta.
A tax on cinema and theatre tickets.
The institution of a special
War surtax on the assessed rateable value of property,
"The collection of a percentage on dividends from investments in Public Limited Companies In Hongkong.
On behalf of all the Unofficial Members of this Council I desire We have been told that income to state that Income Tax is, in tax is enforced in Ceylon, but, our opinion, detrimental to the with all due deference, that fact future of this Colony, and to re- la wholly irrelevant, as conditions quest Your Excellency to appoin? there are so entirely different a Committee to consider and re- from those existing in this Colony.port on alternatives to Income I fear that. Your Excellency, in Tax, for the special purpose of your desire for this Colony to raising revenue for the War Gift make a contribution towards the to the Imperial Government, War Gift to the Imperial Govern- It is my earnest hope, that; just ment, has not quite appreciated and wise solution of this taxation those serious objections to income problem may be found and that tak which I have indicated and what ought to be a free-will offer- which will no doubt be stressed by ing from this Colony will go Home other, Unofficial Members,
with the cordial and united assent of every Member of this Council:
It is hoped, however, that Your Excellency who, in the
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