Sessional_Paper_1939 — Page 98

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Non-residents tax. Corporation Profits Tax.

(i) We considered a tax on non-resident shareholders and on general cor- poration profits but rejected such levies mainly on the grounds of their dis- criminatory nature. We shall discuss these possibilities more fully in dealing with Income Tax.

Fees.

B.

Minor Suggestions Recommended.

(a) School Fees. We were impressed, in our consideration of the fees. derived from Government schools, by a comparison of the relation of fees to salaries obtaining in these schools with that shewn by a non-Government in- stitution. The fees of a representative Government School for European children-The Central British-represent only about 10% of the total ex- penditure, after allowing for pensions, passages, leave salaries and quarters, which together represent an addition of some 60% to the basic salary charges. The salaries of new entrants into the Government Education Service have re- cently been reduced, but we consider that they are still high by comparison with the general level of local non-Government educational salaries. We realise, however, that this high level may be necessary in order to persuade teachers with adequate qualifications to leave England, although a further reduction might, nevertheless, be effected if prospective recruits were aware of the cheapness and advantages of life in the East, or if more locally- recruited masters were engaged.

With regard to fees, we consider that these should be raised considerably in the case of European schools, with, however, extended provision for scholarships and reduced fees to meet the needs of poor parents. Schools for non-Europeans present a more complicated problem. If the fees were kept high the class of the school might gradually be raised. The means of the parent, however, must not be neglected. We consider that the services of a board might advantageously be required to determine the scale of fees ap- propriate to both the school and the parent.

(b) Medical Fees. We have not made any detailed investigation but we believe that the practice of Government hospitals in charging fees appropriate to the position of patients is less strict than that of non-Government institutions and we hope that a comprehensive review of the rates and incidence of such charges will follow the establishment of an Almoner's Department which is now in hand. The possibility of an increase in certain other fees for medical services might also be reviewed.

Betting Duty.

(c) Betting Duty. The present rate of the Betting Duty is 5% on sweep- stakes and 2% on pari-mutuel. We consider that both these rates might be increased without deterring the public from participating in sweep-stakes and pari-mutuel. We would deprecate, however, an increase of this duty having to be borne or shared by the Jockey Club. The Jockey Club, which is a purely social institution, earns no more than a reasonable profit, and we are informed that it will be faced with heavy expenditure in the future. Any increase, therefore, should be derived exclusively from the betting public. An additional 1% on the present pari-mutuel rate, and 1% or 2% on the sweep- stake rate should, after allowing the Jockey Club to retain its percentage as at present, produce approximately $100,000 on the basis of present conditions.

Utility Companies.

(d) The Telephone Company. We are informed that the present franchise of this Company is unsatisfactory in various ways both to the Company and to Government and we recommend that the possibility of revision in such a manner as to secure higher royalties for Government, while removing the features which are at present objectionable to the Company, should be in- vestigated in collaboration with the Company.