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imposition of an Income Tax would no doubt be followed by remissions in other forms of taxation. That would, of course, offer the opportunity of a further simplification of the taxation system and render possible the abolition of various minor irritating taxes, besides making quite unnecessary any of the "minor" in- creases referred to above.

Our conclusion is that the advantages of an efficiently administered income tax over other forms are overwhelming from the point of view of equity, and that, if it be considered that the tax is capable of successful administration in the Colony, it should be imposed as soon as additional revenue on a substantial scale becomes a necessity. In view, however, of the undoubted force of many argu- ments opposing the introduction of the tax locally, we must qualify our recom- mendation in five ways:

(a) We must not be taken as expressing the opinion that such substantial extra revenue is actually necessary; in so far as more revenue is needed owing to the growth of the Colony that very growth is likely automatical- ly to increase the revenue, while it is outside our province to consider how far it may be needed to finance new or improved services. (b) The possibility of the successful working of the tax should first be the subject of a detailed investigation with the assistance of an expert, pre- ferably familiar with the collection of the tax in an Eastern country.

(c) The imposition of the tax involves a new departure in fiscal policy. We assume that it would not be passed through Council by the use of the official majority and that unofficial members of Council will expect to re- ceive, before agreeing to the imposition, some indication of the heads of expenditure to which its yield will be applied.

(d) We feel that it would be unwise to impose a tax of this nature until a substantial body of opinion in the Colony believes that the tax can be levied fairly and efficiently.

(e) The imposition of Income Tax should to some extent be compensated for

by the remission of other forms of taxation.

Chapter VII.

Conclusion.

1. The minor suggestions which we have recommended in Chapter VI B should give an aggregate yield of at least $500,000 per annum, and possibly as much as $1,000,000.

2. If revenue in excess of this figure is required we recommend recourse to one of the three proposals in Chapter VI C. Of these, we believe that an Income Tax would distribute the burden most equitably if it could be effectively ad- ministered and evasion kept within reasonable bounds.

3. Therefore, if Government is satisfied that, after allowing for possible economies, substantial further revenue from taxation is likely to be required within the next few years, it would appear desirable to institute a special expert enquiry into the practicability of Income Tax in the Colony, under the Chairmanship, or at least with the assistance, of a man experienced in the administration of the tax in an Eastern country.