Mm 
 
 \^^m 
 
 A 
 
 
 
 
 
 A 
 
 ^^^= o , 
 
 r'' . 
 
 
 l^O 
 
 
 
 ^^^= c 
 
 |H|h 
 
 
 3^v^ 
 
 
 
 
 ^' 1 
 
 
 
 
 j 
 
 
 , ^ i 
 
 8 
 
 
 igjBj^n 
 
 ^^^= o 
 
 ^^H 
 
 5 
 
 
 ^^^1 
 
 1 
 
 
 ^^^B 
 
 IBF 
 
 ^^H 
 
 6 
 
 
 ^^H 
 
 
 
 
 ^^^^1 
 
 3 
 
 FAC 
 
 ^H 
 
 7 
 
 
 ^^^H 
 
 -j 
 
 ^^1 
 
 ^ 
 
 
 ^^^H 
 
 9 
 
 
 
 
 ■ 
 
 m 
 
 R-^" 
 
 ^ 
 
 Gt » Brit. jnteT^-f^^T-^-^ T^'t"^' ,^ 
 ComTTiittee on Incoir.s T-c^x 
 Rsport. 
 
 ifornia 
 nal 
 
 ty
 
 L&t. Bnt. 
 
 EEPORT 
 
 OF THE 
 
 mTER-DEPARTMENTAL COMMITTEE ON 
 INCOME TAX 
 
 IN THE 
 
 COLONIES NOT POSSESSING RESPONSIBLE 
 GOVERNMENT. 
 
 Presented to Parliament by Command of His Majesty. 
 December, 1922. 
 
 LONDON: 
 PUBLISHED BY IIIS MAJESTY'S STATIONERY OFFICE. 
 
 To be purchased through any Bookseller or diroctlv from 
 
 H.M. STATIONERY OFFICE at the followiug addresses: 
 
 Impekial House, Kingsway, Loxdon, W.C.2, and 28, AmNcnox Street, London, S.W.I 
 
 o7, Peter Street, Manchester ; 1, St. Andrew's Crescent, Cardiff: 
 
 or 23, Forth Street, Euinuurgh. 
 
 Price 9d. Net. 
 Cmd. 1788.
 
 EEPOIIT 
 
 OF THE 
 
 Inter-departmental Coinmittee on Income Tax 
 in the Colonies not possessing responsible 
 government. 
 
 CONSTITUTION OF ^J^HE COMMITTEE. 
 
 Sir G. E. A. Grindle, K.C.M.G., 
 C.B. {Chairman) 
 
 Mr. L. Browett, C.B.E. . . 
 Mr. W. B. Blatch, M.B.E. 
 Mr. E. a. Eborall . . 
 
 Mr. H. Brittain 
 
 Mr. H. G. Bushe . . 
 Mr. a. Ehrhardt, K.C. 
 Mr. E. B. Boyd {Secretarij). . 
 
 Colonial Office. 
 
 
 Inland Revenue Department. 
 
 Treasury. 
 
 Colonial Office. 
 
 Note. — The costs incurred by the Coiinnittee amount to £51 5s. 
 of wliich £29 5s. is llic cost of jniiiliiin; and ])ublication.
 
 4707 
 
 TABLE OF CONTENTS. 
 
 rAK\. PAGE 
 
 1. Terms of reference ... ... ... ... ... ... ... 4 
 
 2. Meetings 4 
 
 3. Correspondence received in the Colonial Office ... ... ... 4 
 
 4. Representatives of Colonial Associations interviewed ... ... 4 
 
 5. Points of view of resident and non-resident taxpayers ... ... 4 
 
 6-8. The Model Ordinance 5 
 
 9-10. Scope of Income Tax ... ... ... ... ... ... ... 5 
 
 11-14. Basis of assessment ... ... ... ... ... ... ... 6 
 
 15. Ascertainment of " Chargeable Income " ... ... ... ... 7 
 
 16. Interest on borrowed money ... ... ... ... ... ... 7 
 
 17. Deductions for bad and doubtful debts ... ... ... ... 7 
 
 18. Deductions for exhaustion, wear and tear of property, etc. ... 7 
 
 19. Deductions for cost of replacing obsolete machinery, etc... ... 7 
 
 20. Standard rates of depreciation ... ... ... ... ... 7 
 
 21-22. Deduction in respect of trade losses ... ... ... ... ... 8 
 
 23-24. Certain deductions in the case of residents in the Colony and 
 
 British subjects ... ... ... ... ... ... ... 8 
 
 25-26. Exemptions 9 
 
 27. Question of exemption of interest on Colonial Government Loans... 9 
 
 28. Insurance companies ... 10 
 
 29-30. Deduction of tax from dividends of companies ... ... ... 10 
 
 31. Wife's income ... ... ... ... ... ... ... ... 11 
 
 32-36. Graduation of the tax : individuals and companies ... ... 11 
 
 37-42. Taxation of non-residents ... ... ... ... ... ... 12 
 
 43-44. Double Income Tax Avithin the Empire 13 
 
 45-48. Proposal for apportionment of tax between Exchequers... ... 14 
 
 49-50. Double Income Tax: "relief before payment" ... ... ... 14 
 
 51-52. Minor difficulties 15 
 
 53-55. Assessment of non-resident traders ... 15 
 
 56-58. Proposed appointment of a,gcnt in the United Kingdom ... ... 16 
 
 59-60. Double Income Tax — Intercolonial relief ... ... ... ... 17 
 
 61. Administration ... ... ... ... ... ... ... ... 17 
 
 62. Powers of Commissioner ; machinery for assessments and for 
 
 appea^ls, etc. ... ... ... ... ... ... ... ... 18 
 
 63-64. Conclusion ... ... ... ... ... ... ... ... 18 
 
 Appendices— 
 I. The Model Income Tax Ordinance ... ... ... ... ... 19 
 
 II. Tabular calculation to illustrate working of the proposed system of 
 
 setting-off of losses against future profits ... ... ... ... 35 
 
 III. Example to explain the proviso to sub-section (1) of section 23 of 
 the Model Ordinance relating to the deduction of tax fiom the 
 dividends of companies ... ... ... ... ... ... 40 

 
 Terms of Keference. 
 
 1. Wc were appointed a Committee in January of this year to 
 consider and report on questions relating to the Income Tax laws 
 in the Colonies and Protectorates and, if possible, to prepare a model 
 Income Tax Ordinance for the general use of Colonial Governments ; 
 or, at any rate, to recommend a definite and considered policy with 
 regard to such legislation. Questions relating to the effect of United 
 Kingdom or Dominion Income Tax on residents in the Colonies fell 
 to be considered only in so far as these taxes involved the imposition 
 of Double Income Tax on persons liable to pay Colonial Income Tax, 
 and then solely wdth a view to the recommendation of such improve- 
 ments in Colonial legislation as might appear to be required. 
 
 Meetings. 
 
 2. We have held in all eighteen meetings. We had hoped to 
 finish our work in time to allow of our recommendations, if approved 
 by the Secretary of State, being communicated to Colonial Govern- 
 ments early in the autumn of this year, Unfortimately, pressure of 
 business in the Inland Revenue Department compelled us to suspend 
 our meetings during the period devoted to the preparation of the 
 annual financial legislation in this country and to its consideration 
 in Parliament, and we have thus been unable to submit this report 
 as early as we had hoped. We trust that the full consideration we 
 have now been able to give to the problems before us wiU have resulted 
 in some compensating improvement to set against any disadvantage 
 that may accrue from the delay. 
 
 3. Correspondence received in the Colonial Office. — By the directions 
 of the Secretary of State, letters and memoranda received in the 
 Colonial Office from time to time from persons and associations in 
 the Colonies and in this country containing representations or sugges- 
 tions with regard to existing Colonial Income Tax legislation have 
 been referred to us and have been carefully considered. We have 
 also had before us various questions raised by Colonial Governments 
 in regard to existing or contemplated legislation, and we have con- 
 ferred with the Departments of the Colonial Office concerned. 
 
 4. Representatives of Colonial Associations interviewed. — At the 
 first meeting it was agreed that it would be well to invite representa- 
 tives of tlie various Colonial Associations in this country to attend 
 and give evidence on the difliculties arising out of Income Tax 
 legislation in the Colonies, to wliich tliey had drawn attention. 
 Some of our early meetings, therefore, were devoted to informal 
 (lis<:ussions witji representatives of various bodies, including the 
 Went India Committee and the Association of British Malaya. 
 
 5. Points of vivv) of resident and non-resident taxpayers. — We have 
 welcomed these o])])ortunitieH of acquainting ourselves with the point 
 of view of different classes of t}ix|»a,yers, l)oth resident and non- 
 residf-nt. It is imjiortant to mal«^ the administrjition of taxing Acts 
 as little onerous as ])ossible to the taxpayer, esjiecially in the case 
 of a roni))aratively new tax, such as the Income Tax is in the Colonies.
 
 We have throughout tried to keep this object in view in framing our 
 recommendations so far as is consistent with the efficient working of 
 the Acts. This quahfication is necessary. It must not be forgotten 
 that an Income Tax can only be fair in its incidence as between different 
 classes and individuals so long as the law is so drawn, and the machinery 
 for its enforcement is so efficient, as not to allow any substantial 
 amount of income to escape the tax. The taxpayer has really as 
 much interest as the Government in preventing evasion. 
 
 The Model Ordinance. 
 
 6. Our recommendations are reflected in the Model Ordinance 
 annexed to this Report as Appendix I. In the following paragraphs 
 we give our reasons for adopting the principles upon which the 
 more important provisions of the Ordinance are based. 
 
 7. The Model Ordinance was, in the first place, drafted after a 
 very careful study and comparison of aU the existing Colonial Income 
 Tax Acts and Ordinances, and during its subsequent consideration 
 every effort has been made to give due weight to the conditions pre- 
 vailing in the Colonies. While realising the great diversity of Colonial 
 conditions and requirements, we are of opinion that uniformity of 
 legislation should be aimed at as far as possible. We think that the 
 easiest and most expeditious means of securing that degree of imifor- 
 mity which is generally admitted to be desirable will be for the officers 
 responsible for the preparation of Colonial Income Tax legislation 
 to take a single model as the basis on which to work. We recommend, 
 therefore, that the Model Ordinance be sent to all Colonies and Pro- 
 tectorates where Income Tax laws are already in force, and that the 
 Colonial Governments be advised to repeal the existing laws and 
 introduce fresh legislation on the lines of the Model Ordinance. We 
 suggest also that the Model Ordinance be used as a guide by all 
 Colonies which may in the future find it necessary to introduce an 
 Income Tax. 
 
 8. With regard to this suggested use of the Model Ordinance, it 
 may not be out of place to observe that the wording of the principal 
 clauses has been selected with the greatest possible care to make 
 corresponding provisions fit into each other and the general scheme 
 of the Ordinance, and that if an}^ of these clauses should be altered 
 it is essential that full consideration should be given to the resulting 
 changes v/hich will be required in corresponding provisions elsewhere 
 in the Ordinance. 
 
 Scope of Income Tax. 
 
 9. The first and fundamental question which we had to decide 
 was that of the scope of the Income Tax charge. After careful con- 
 sideration we have come to the conclusion that the most appropriate 
 scheme for the Colonies generally is one which imposes tax upon 
 income which either has its origin in the Colony, or, while having its 
 origin outside the Colony, is received in the Colony. The adoption 
 of this straightforward rule does not result in anything more than 
 the taxation of income that comes within the Colonial jurisdiction ; 
 
 (3/345)Q A 2
 
 moreover, it not only avoids the various difficulties inherent in au 
 Income Tax code under which the amount to be charged depends 
 in part upon whether the person is resident or non-resident, but also 
 reduces the problems arising out of double taxation of income to com- 
 paratively small dimensions. 
 
 10. Admittedly, there are attractions in seeking to impose the 
 tax on the incomes of residents in the Colony wheresoever arising, 
 and whether remitted to the Colony or not, and we are aware that 
 tax has been so imposed in more than one instance. We feel, however, 
 that the comphcations and difficulties which necessarily accompany 
 this method of taxation are so great that, in the special circumstances 
 of comparatively small communities, it is in the best interests of a 
 Colony to limit the scope of the Income Tax charge to income which 
 arises in the Colony or is brought into the Colony. 
 
 Basis of Assessment. 
 
 11. WTien we had reached these conclusions as to the scope of 
 the charge, our next task was to deal with the basis upon which the 
 income should be assessed. In this connection, the most important 
 item of income to be considered is undoubtedly profits from business. 
 Such profits are assessed in the United Kingdom on the basis of the 
 average profits of the three preceding years, while the majority of 
 the Colonies concerned take the preceding year as the basis. 
 
 12. It was represented to us that traders resident in the United 
 Kingdom doing business in the Colonies would find it convenient to 
 have the same basis of assessment for each of the Income Taxes to 
 which they Avere liable. On the other hand, we were informed that 
 business firms in the West Indies were mostly in favour of the pre- 
 ceding year's profits as the basis, and that the substitution of the three 
 years' average would meet with much opposition. Inasnmch as the 
 Colonies, generally speaking, take the preceding year as the basis, it 
 seemed to us undesirable to make a change if it could possibly be 
 avoided. We may point out that the Royal Commission on the Income 
 Tax* recommended the adoption of the preceding year's profits as 
 the basis of assessment in tlie United Kingdom. 
 
 13. On the whole, we are of opinion that the profits of the preceding 
 year aft'ords the best basis of assessment for the Colonies. This 
 basis ]ias the great advantage that tax is payable on a profit in the 
 year following that in which tlie ])rofit is made, and not, in part, two 
 or even three years later as under the three years' average system. 
 
 14. it is clearly desirable that the basis for the computation of all 
 classes of income for the purposes of the tax should be the same. We 
 therefore j»ro])ose that tin; tax should ])e levied on what we have 
 termed in the Ordinance the "chargeable income" of any person 
 for the year ])receding the year of assessment. We define the expres- 
 sion " chargeable income " to mean the aggregate income of any person 
 
 * 'Vhf Koynl (V)mniiHHif(n icforretl to here and subsequently in this Report 
 in thr- ]U>yn\ ('oriiiniMHion on the Income Tax, whose Report (Cnitl. 615) was 
 (Int'-'i mil March, 1920.
 
 after deducting the expenditure incurred in acquiring the income and 
 the various other deductions for which provision is made. We have 
 thought it desirable to avoid referring to "' assessable income " and 
 " taxable income," as these expressions have meanings as defined by 
 the United Kingdom Income Tax Acts somewhat different from the 
 meaning of " chargeable income " as defined in our Ordinance. 
 
 Ascertainment of " Chargeable Income." 
 
 15. Without going into detail, we consider that all outgoings and 
 expenses wholly and exclusively incurred in the production of income 
 should be allowed as deductions in computing the amount of a person's 
 " chargeable income." On the other hand, no deduction should be 
 admitted for expenditure of a domestic or private character or for 
 capital expenditure. In our Model Ordinance we indicate the type 
 of expenditure which should be admissible, and that which should 
 not be admissible, as a deduction in computing the " chargeable 
 income." 
 
 16. Interest on borrowed money. — We propose that interest paid by 
 a taxpayer on borrowed money which is used in acquiring his income 
 should be deducted in ascertaining " chargeable income," but that 
 a person who pays interest to a non-resident mortgagee or debenture 
 holder should deduct tax from such interest and pay it over to the 
 Colonial Government. 
 
 17. Deductions for had and doubtful debts. — It will be seen that we 
 have dealt specifically with the subject of bad and doubtful debts 
 incurred in business, and that the legislation which we recommend 
 is designed to make the laws of the' Colonies in this matter correspond 
 with commercial practice and the procedure followed by the taxing 
 authorities in the United Kingdom, and at the same time to escape 
 from the unsatisfactory position disclosed by the judgment given by 
 the Privy Council in 1921 in the Jamaican case of the " Gleaner " 
 Company, Limited, versus the Assessment Committee.* 
 
 18. Deductions for exhaustion, wear and tear of ijroperti/, etc. — In 
 the matter of allowances for depreciation of property used for business 
 or professional purposes, we propose the adoption of the United 
 Kingdom practice in relation to plant and machinery. In this country, 
 in ascertaining for taxing purposes the profits of any trade, such 
 deductions may be allowed as the Income Tax Commissioners consider 
 just and reasonable as representing the diminished value by reason 
 of wear and tear during the year of any machinery or plant used for 
 the purposes of trade and belonging to the person by whom it is 
 carried on. 
 
 19. Deduction for cost of replacing obsolete macJiinery, etc. — We also 
 make provision in the Model Ordinance for an allowance in respect 
 of the cost of replacing obsolete or worn-out plant and machinery 
 similar to that in force in the United Kingdom. 
 
 20. Standard rates of depreciation. — -We think that it may be of 
 advantage to Colonial Governments if they are furnished with the 
 
 * See Law Reports, 1922— Vol. II. A.C., p. 169. 
 (B 3/345)Q A 3
 
 8 
 
 rates of dei)reciation allowed for Income Tax purposes in the United 
 Kingdom, where standard rates have been agreed with taxpayers in 
 particular trades. We recommend, therefore, that the Board of Inland 
 Kevenue should be approached with a view to their supplying for the 
 use of the Colonial taxing authorities a schedule of the rates which 
 have been agreed upon in the case of important trades in this country. 
 These rates, in so far as they are applicable to plant in use in this 
 country, will normally have to be increased for plant used overseas. 
 
 21. Deduction in respect of trade losses. — Where the basis of assess- 
 ment is that of the profits of the preceding year, the question at once 
 arises as to some provision for setting off losses against future profits ; 
 and dissatisfaction has been caused in certain Colonies where no 
 arrangement of this kind has been made. The equitable case for 
 such a provision is obvious, and was recognised by the Royal Com- 
 mission, who stated in their Report (para. 482) : — 
 
 ■■ We think, therefore, that the taxpayer might legitimately feel 
 some grievance if under the new system he were not enabled to carry 
 forward his loss against future profits, and we accordingly suggest 
 
 that the existing provision by which repayment of tax is 
 
 granted in cases of loss by reference to the aggregate income of the 
 year, should continue in force, and that any balance of loss not so dealt 
 with should be permitted to be carried forward (on the analogy of 
 the Statute of Limitations) for a period of six years." 
 
 22. The adoption of this proposal, however, might create 
 serious difficulty in the case of a Colony which depends for 
 the bulk of its Income Tax upon the profits of some particular 
 industry. If the concession of carrying forward losses v/ere 
 imrestricted, the Colonial Government might be deprived of the 
 greater part of its revenue from Income Tax for a lengthy 
 period. This contingency would be very serious for the Colony, 
 and we feel that it \viU be necessary to fix a limit to the loss which 
 can thus be set against what would otherwise be the " charge- 
 able income " in any one year. We therefore recommend that to the 
 extent that a loss incurred in any year cannot be wholly set off against 
 the taxpayer's other income for that year, the loss shall be carried 
 forward to be set off against his " chargeable income " for the next 
 year, and if necessary, the same process shall be repeated in each of 
 the four succeeding years, subject to the condition that in no one of 
 those years shall the deduction on account of this loss be allowed to 
 an amount wliicli would reduce the amount of tax payable for any 
 year to loss than half the amount of tax which would have been pay- 
 able if nf) (h'duction had been made for such loss. While under this 
 sy.steni a taxjjayer may in exceptional circumstances incur a loss, 
 the whol(! of which may not be set off against profits, it will be appre- 
 ciated that the same result not infre(juontly happens under the system 
 of a.sHCHHnu'nt on the throe years' average. 
 
 (Sec illuHtrations in Appendix IT.) 
 
 23. Certain drdiirfiotis in. the rase of residents in the Colony and 
 British suhjrrfs. In the case of individuals who are resident in the 
 Colony. f>r wlio arc I'ritish subjects resident elsewhere, we have pro-
 
 vided for the deduction of a fixed sum to be free of tax, and also for 
 deductions in respect of {a) earned income, (b) wife, (c) children, and 
 (d) life insurance premiums, etc. 
 
 24. We consider that the allowance of a fixed sum to be free of 
 tax is essential, but that it is primarily a question for each Colony to 
 decide for itself whether it is desirable to include in its Income Tax 
 legislation all or any of the other deductions. These other deductions 
 are perhaps not essential, having regard to the graduation of the rate 
 of tax and to the fact that the rates generally in force in the Colonies 
 will, it is anticipated, be substantially lower than those in force in 
 the United Kingdom. If, however, the deductions are thought 
 necessary, we recommend that they shoidd be granted in the manner 
 indicated in the Model Ordinance. For example, we think that where 
 the principle of differentiation between earned and unearned incom-e 
 is adopted, the procedure described in para. Ill of the Report of 
 the Koyal Commission and now in force in the United Kingdom 
 should be followed in the Colonies, i.e., for the purpose of computing 
 the chargeable income, the figure to be included for any earned income 
 should be the amomit of that income diminished by a certain fraction 
 thereof. The fraction so adopted in the United Kingdom is one-tenth, 
 subject to a maximum deduction of £200 in the case of any individual, 
 but we recognise that this fraction may not be considered suitable 
 for the Colonies, where conditions differ from those in the United 
 Kingdom, 
 
 Exemptions. 
 
 25. We have inserted in the Ordinance a section (No. 8) to make 
 provision for certain exemptions from Income Tax. The items 
 specified in this section are intended merely as a list for the considera- 
 tion of the local Governments, and are liable to variation in accordance 
 with local conditions. 
 
 We understand, however, that the Secretary of State has already 
 communicated to certain Colonial Governments his views as to some 
 of the items, such as the official emoluments of the Governor or of the 
 officer administering the Government in his stead, and the emolu- 
 ments of members of the permanent Consular Services of foreign 
 countries. The last-mentioned item represents the old-established 
 practice in the United Kingdom of exempting the emoluments of 
 foreign Consuls and those of the permanent members of their staffs. 
 Such members of the staffs, however, as are appointed locally and 
 paid by the Consul wiU not be entitled to exemption. 
 
 26. It may be pointed out that it is not intended that where the 
 income of the Government Savings Bank is exempted, depositors' 
 interest should be exempt from tax ; this interest will, of course, be 
 included in the return of income to be rendered by the depositor and 
 will, as such, be subject to tax. 
 
 27. Question of exemptio7i of interest on Colonial Government Loans. 
 — A provision is included in the model Ordinance imder which the 
 Governor may by proclamation exempt interest payable on any Govern- 
 ment loan, either generally or only in respect of such interest as is 
 
 (B 3/345)Q A 4
 
 10 
 
 pa vable to persons not residing in the Colony. Such a provision has been 
 shown by experience to be useful in facilitating the flotation of Colonial 
 loans. The policy of such an exemption is outside the scope of our 
 investigations, save in so far as it affects the incidence of the tax. 
 Looking at the matter solely from this point of view, we cannot but 
 regard the pohcy as vmsoimd. It seems to us that if the object in 
 view is the attraction of outside capital to the Colony, it could be 
 achieved if the exemption from tax were confined to interest payable 
 to persons not residing in the Colony. For this reason we have drafted 
 the provision in our Ordinance in such a form that the Government 
 can issue a loan with the privilege of exemption accorded only to 
 non-residents. 
 
 Insurance Companies. 
 
 28. In view of the difficulty of applying the ordinary method of 
 computing profits to the case of insurance companies, it is desirable 
 to make special provision for the basis upon which their profits should 
 be charged to tax. After considering the legislation in force for this 
 purpose in the United Kingdom, in the Dominions, and in various 
 Colonies, we have come to the conclusion that the law at present in 
 force in Jamaica provides in its general principles a system which is 
 suitable for the Colonies. We have, therefore, embodied the provisions 
 of the Jamaican Law in the Model Ordinance, with such amendments 
 as appear necessary in order to secure conforjnity with the principles 
 upon which the Model Ordinance proceeds. 
 
 Deduction of Tax eeom Dividends of Companies. 
 
 29. We recommend that companies registered in a Colony should be 
 entitled to deduct from the dividends paid to their shareholders tax 
 at the rate paid or payable by the company on the income out of 
 which the dividends are paid, and that such companies should, upon 
 payment of a dividend, whether tax is deducted from such dividend 
 or the dividend is paid free of tax, furnisli to each shareholder a certi- 
 ficate setting out the amount of the dividend to which such share- 
 holder is entitled and the amount of tax which the company has 
 deducted, or which is a])])licable thereto, as the case may be. It is 
 not necessary hoi-e to defend the principle of taxation of dividends by 
 (h'd notion at tlic source, which has long been recognised in the United 
 Kingdom as a very convenient and effective method of collecting tax. 
 
 It is to be observed that though the gross amount of a sliareholder's 
 dividend falls to be included by him in his statement of income for the 
 ]»ui])oses of tlie Model Oidinance the tax suffered by the shareholder 
 indirectly, i.e., through tlu; com])any, must be taken into account 
 in arriving ut the total amount of tax payable by him upon his income, 
 and r<'p;iyiiienl of |;ix made wlieic lU'cesHary. {See illustration in 
 Aj)peiidix III.) 
 
 ;}0. \V<' have conlined the system of taxation of dividends at the 
 Kourco to the dividends declared by com])anies registered in the Colony, 
 becau.sc Huch coni])anies are subject to the jurisdiction of the Colonial 
 leginhiture jind can be enipowei<'d by local legislation to make the 
 deduction. Jn this connection, our attention has been drawn to a
 
 11 
 
 provision in certain Colonial Ordinances which has purported to 
 make all Companies, whether incorporated locally or not, liable, as 
 agents for their shareholders resident outside the Colony, for payment 
 of the tax upon dividends payable to them, v/hile neither laying down 
 a method, nor devising machinery by which the Company may recover 
 from the shareholder any tax so paid. We are agreed that such a 
 provision as this cannot be justified. 
 
 Wipe's Income. 
 
 31. It will be seen that we have followed the practice in the United 
 Kingdom and in the Dominions and Colonies generally of aggregating 
 the income of husband and wife for Income Tax purposes, but that 
 special provision is made to enable the appropriate part of the tax 
 charged to be recovered, when necessary, from the wife without the 
 formality of an actual assessment upon her. 
 
 Graduation of the Tax : Individuals and Companies. 
 
 32. In the United Kingdom the Income Tax payable by individuals 
 is graduated, but that payable by other persons, i.e., companies, etc., 
 is charged at a flat rate without any statutory allowances. As regards 
 the tax deducted by a company from dividends paid to individuals, 
 
 *the appropriate adjustment is made either by repayment of the excess, 
 if the amount deducted exceeds the amount for w^hich the shareholder 
 is personally liable, or, in other cases, by the imposition of an additional 
 Income Tax called Super -tax. 
 
 33. In several of the Colonies, on the other hand, the rate of Income 
 Tax has been graduated in the case of companies as well as in the case 
 of individuals. 
 
 34. While it is in theory possible to justify an attempt to fit the 
 burden of an Income Tax to the circumstances of the individual by 
 graduating the rate of tax, we can find no sufficient reason for graduat- 
 ing the rate of tax payable by companies according to the amount of 
 the profits they make. 
 
 35. In our opinion companies should pay the same amount of tax 
 per £ of assessable profit whatever the amount of that profit may be. 
 The tax deducted from dividends paid to shareholders should in due 
 course be credited against the tax properly due on their respective 
 incomes as indicated in paragraph 29 of this Report. We therefore 
 recommend that Colonial Governments be advised to adopt, in the 
 case of companies, a flat rate of tax. 
 
 36. In determining the flat rate to be charged in the case of com- 
 panies, the Colonial authorities will no doubt have in mind several 
 considerations, such as the amount of revenue required from Income 
 Tax, the average rate of duty hitherto paid by companies, and the 
 labour involved in making repayments to individuals if the rate be 
 fixed too high. We have, therefore, not attempted to suggest where, 
 in any given scheme of graduation, the flat rate should be fixed. 
 
 (B 3/345)Q A 5
 
 12 
 
 Taxation of Persons Eesident outside the Colony. 
 
 37. Section 26 of the Model Ordinance follows the provisions 
 of Kules 5 to 12 of the General Rules applicable to Schedules A, B, 
 C, D, and E in the First Schedule to the United Kingdom Income Tax 
 Act, 1918. These Rules were evolved after very careful thought and 
 consideration, and with due appreciation of the difficulties inherent 
 in any scheme for the taxation of persons not resident in the country 
 where the tax is levied. By adopting the United Kingdom scheme, 
 we feel that the Colonies will not only have the benefit of machinery 
 which has been carefully devised for its purpose, and is actually in 
 use, but wull thereby avoid many of the difficulties that have arisen 
 from methods which certain Colonial Governments, whose legislation 
 is in this respect not based on the United Kingdom procedure, have 
 employed in order to tax the profits of non-resident persons trading 
 through agents in a Colony. 
 
 38. For example, our attention has been particularly drawn to 
 Section 24 of the Trinidad Ordinance No. 8, 1922, which is, in our 
 opinion, open to serious criticism. This Section provides that v^^here 
 the profits of a non-resident trader selling goods through an agent in 
 Trinidad cannot be ascertained to the satisfaction of the Trinidad 
 Commissioner, the non-resident's profits are to be assumed to be an 
 amount not exceeding 10 per cent, of the selling price. The Section 
 then proceeds to define w^hat is to be deemed to constitute trading 
 within Trinidad, in the following terms : — " A non-resident person 
 shall be deemed to be trading within the Colony in every case where 
 liis recognised agent or other representative resident in the Colony 
 sells in the Colony the goods of such non-resident person, whether 
 the contract for the sale of the goods, the delivery thereof, or the pay- 
 ment therefor, is made within or out of the Colony." 
 
 39. We consider that there is no necessity either to fix or to limit 
 the percentage of turn-over or receipts to be adopted as the basis of 
 the assessment of the tax, whether in the case of non-resident traders 
 generally, or, as has been provided in some Colonics, in the special case 
 of non-resident shipping companies. We prefer the United Kingdom 
 method of leaving the taxing authority, in any case where the actual 
 profits which the non-resident derives from his trade within the 
 country cannot be ascertained, to fix such a fair and reasonable per- 
 centage as the facts of the particular case may justify. 
 
 40. With regard to the attempted definition in the Trinidad 
 Ordinance of cases in which there " shall be deemed to be trading 
 witliin the Colony," we think it may be worth while to quote the 
 opinion of the Royal Commission on this matter, as recorded in 
 para. 47 of their Report : — " We shall not attempt to define in any 
 net form of words what constitutes trading ivitldn the United Kingdom 
 as distinct from trading with the United Kingdom. It would be 
 difficult to evolve any reasonably short definition which could be used 
 us a touclistonc to determine in every particular instance whether a 
 series of transactions falls within the one category or the other." In 
 our oj)inion Section 24 of tlui Trinidad Ordinance has not overcome
 
 13 
 
 . the difficulty to which the Royal Commission referred and must fail 
 to achieve its object. 
 
 41. It is clear that no series of rules can be evolved which would 
 cover every case that may arise. By way of illustration, we may cite 
 what may be regarded as two extreme examples : — 
 
 (a) In the first case, a non-resident trader authorises a resident 
 
 in the Colony to carry on a regular agency there, to make 
 contracts on his behalf, and to deliver and receive payment 
 for his goods. In such circumstances there can be no 
 doubt that trading is carried on in the Colony by the non- 
 resident trader through his agent. 
 
 (b) In the second case, a non-resident trader sends price-lists 
 
 of his goods to some person resident in the Colony, who 
 distributes those lists there and canvasses for orders on 
 behalf of the non-resident. But this person is a mere 
 canvasser and does nothing more for the non-resident 
 trader. The purchaser in the Colony makes his contract 
 outside the Colony, and delivery and payment are also 
 made outside the Colony. Here it would be obviously 
 improper to hold that trading is carried on in the Colony 
 . by the non-resident trader through the canvasser, although, 
 of course, the latter would be liable for tax in respect of 
 his remuneration. 
 
 Between these two extremes lies an indefinite variety of gradations 
 in the manner in which such business may be conducted, and each 
 case must be determined on the particular facts. 
 
 42. In concluding this Section of our Report, we wish to make it 
 clear that in our opinion, where a non-resident has an agent in the 
 Colony who carries on business for him there, the profit arising from 
 such business should be taxed, as is the case in this country, but, 
 while tax should be charged on profit gained by trading in the Colony, 
 it should be not charged on profit arising from trading with the Colony. 
 
 Double Income Tax within the Empire. 
 
 43. The question of relief from double taxation of income within 
 the Empire was exhaustively considered by a Sub-Committee appointed 
 by the Royal Commission to confer with representatives of the 
 Dominions on the subject. The recommendations of this Sub- 
 Committee were accepted without reservation by the Royal Commission 
 (paragraph 70 of their Report), and were as follows : — 
 
 " Firstly, that in respect of income taxed both in the United King- 
 dom and in a Dominion, in substitution for the existing partial rehefs 
 there should be deducted from the appropriate rate of the United 
 Kingdom Income Tax (including Super-tax), the whole of the rate 
 of the Dominion Income Tax charged in respect of the same income, 
 subject to the limitation that in no case should the maximum rate of 
 relief given by the United Kingdom exceed one-half of the rate of
 
 14 
 
 the United Kingdom Income Tax (including Super-tax) to which the 
 individual taxpayer might be liable ; and 
 
 " Secondly, that any further relief necessary in order to confer 
 on the taxpayer relief amounting in all to the lower of the two taxes 
 (United Kingdom and Dominion), should be given by the Dominion 
 concerned." 
 
 44. This scheme was put into force, so far as this country is con- 
 cerned, by the United Kingdom Finance Act of 1920, and the comple- 
 mentary action to be taken by Colonies under the scheme was the subject 
 of a " MsceRaneous " despatch of the 19th November, 1920, from the 
 Secretary of State to aU Colonies where Income Tax legislation was 
 then in force. 
 
 45. Proposal for apjjortionment of fax between Exchequers. — In this 
 matter of double taxation, witnesses who came before us urged that 
 every person in the Empire should be assessed where he is resident 
 or has his principal place of business, and nowhere else. The whole 
 tax could, it was suggested, be paid in the place of residence or control, 
 and subsequently divided between the respective Govermnents on 
 some agreed basis. 
 
 46. This proposal was advocated as being the simplest method of 
 avoiding double taxation, and at the same time of obviating the 
 difficulties which arise from the existence of different bases of assess- 
 ment to Income Tax in various parts of the Empire and from the 
 varying decisions of local authorities. 
 
 47. The proposal is by no means new. It is one which was dealt 
 with by the Sub-Committee of the Koyal Commission. This Sub- 
 Committee, the meetings of which were attended by representatives 
 of the Dominions, emphatically rejected it, on the ground that " there 
 are serious objections, not the least being that it obscures the inde- 
 pendent right of taxation inlierent in every State, and may create the 
 false impression that a State is exempting a class of income which it 
 is in fact charging ; or that it is contributing towards the revenue 
 of another State " (para. 19 of the Sub-Committee's report, printed 
 as Appendix I to the Report of the Royal Commisssion). 
 
 48. The objections to adopting any proposal of this character seem 
 to us conclusive. 
 
 49. Double Income Tax : " relief before payment.''' — A difficulty 
 which in certain quarters had been thought to impair the working 
 of the scheme of relief recommended by the Royal Commission 
 was ch'uily due to a misundcistaMding of tlie procedure followed by 
 the InUiiid Revenue authorities in this country. For example, the 
 representatives of the West India Committee and the Association of 
 liritisli Mahiyu coiiqjhiined tliat under tlie present system the taxpayer 
 was coiiipcllcd to ])iiy his full aniount of tax both in tlie United Kingdom 
 and in tln^ Colony, and subse(|U('ntly to make a claim for repayment 
 in <'ither or both countries. They re])resented that, as a result of this, 
 delays occurred, and considerable sums of money were " locked up "' 
 with injurious cfTcct uj)f)n tlie tax])ay('r's })usiiu'ss. As a matter of 
 fact, however, the law in the United King(h)m (Finance Act, 1920, 
 Section 27 ( 1 ) ) grants relief to " any person who has paid, by deduction
 
 15 
 
 or otherwise, or is liable to pay, United Kingdoni income tax." In accord- 
 ance with the recommendation of the Royal Commission, the section 
 contemplates that the relief shall be given, whenever possible, by way 
 of adjustment before payment of the United Kingdom tax. 
 
 50. At the present time the Colonial Ordinances generally contain 
 a corresponding provision for the purpose of giving the reciprocal 
 relief contemplated by the scheme. This provision was drafted in 
 the Colonial Office, but further consideration has shown that if relief 
 is to be given before payment of the tax — which in our opinion should 
 be the case — it is necessary tliat the Colonial provision should go a 
 
 ' little farther than does Section 27 of the United Kingdom Finance Act, 
 1920. Accordingly, in dealing with this matter in our Model Ordinance 
 we have made the slight alteration necessary to ensure that relief may 
 be granted upon proof of liability to pay tax in the Colony and in the 
 United Kingdom and before actual payment. 
 
 51. Minor difficulties. — Some of the difficulties which business firms 
 are now experiencing in relation to their claims to relief from double 
 taxation may doubtless be attributed to the novelty of Income Tax 
 legislation in the Colonies. These difficulties will, it is hoped, dis- 
 appear in time. Similar difficulties have had to be overcome in the 
 workjng of claims to relief from double taxation where the United 
 Kingdom and the Dominions are concerned. Relief in respect of 
 Double Income Tax was first granted by the United Kingdom Ex- 
 chequer in 1916, and thus for the past six years the problem has been 
 faced in relation to the Dominions. The Inland Revenue Department 
 have found that the scheme adopted has, on the whole, worked very 
 smoothly, and has certainly not given rise to any insuperable diffi- 
 culties. Isolated cases must inevitably occur from time to time 
 requiring special consideration, but they have been few in number 
 and there is certainly no general dissatisfaction in this country on the 
 subject. 
 
 52. It has been pointed out that the drawing up of profit and loss 
 accounts to show what profits arise in a Colony involves increased 
 clerical and accountancy charges ; this work is, we fear, sometimes 
 inevitable in the case of persons liable to pay Income Tax levied by 
 more than one country. 
 
 53. Assessment of non-resident traders. — It is clearly desirable that 
 non-residents who derive income from a Colony should contribute 
 their fair share to the expenses of the administration which renders it 
 possible to earn that income. We are satisfied, however, that the 
 non-resident trader, e.g., the company managed and controlled in this 
 country and trading in various Colonies, does find serious difficulties 
 in dealing with the question of determining the several liabilities to 
 tax abroad, and that while these difficulties will certainly be diminished 
 by a more uniform system of Income Tax legislation in the Colonies, 
 they will still remain of a formidable nature. It has been urged that 
 -among the difficulties inherent in the present system are : — 
 
 (1) The trader's representatives on the spot are often not com- 
 petent to deal with matters of taxation ; and, if they were 
 competent, it would usually be impossible to furnish them
 
 16 
 
 in good time with the whole of the information which the 
 Colonial authorities might require ; 
 
 (2) The trader's representatives are often merely agents, and he 
 
 is imwiUing to give such agents confidential information 
 regarding his profits ; 
 
 (3) If the trader attempts to deal with the matter by corre- 
 
 spondence, it is difficult for him adequately to present his 
 case — the more troublesome matters requiring personal 
 explanation and discussion ; 
 
 (4) Complete accounts are seldom kept in the Colony, and the 
 
 books cannot be produced to the Colonial authorities. 
 
 Whether justified or not, any suspicion that, o"\viiig to lack of faci- 
 lities to present his case, the non-resident is called upon to bear an 
 unfair share of the burden of the tax is bound to cause a Colony 
 material injury by driving away capital and trade. 
 
 54. On the other hand, Colonial Governments must have serious 
 difficulties in dealing with the Income Tax due from non-resident 
 taxpayers. Accounts may be furnished by post, but there is little or 
 no opportimity of submitting them to such tests and checks as are 
 possible in the case of residents. Correspondence involves delay,* and 
 is, as a rule, an unsatisfactory substitute for personal discussion. We 
 see reason to fear that the Colonial Governments may in some cases 
 lose an appreciable portion of the tax which is really due to them. We 
 think, therefore, it is very desirable that they should have more 
 facihties than they have at present for investigating the accounts of 
 non-resident traders before proceeding to assessment. 
 
 55. We are convinced that it is desirable, both in the interests of 
 the Colonial Governments and of the non-resident traders, that an 
 attempt should be made as far as possible to overcome these difficulties. 
 Having regard to the close financial relations between this country 
 and the Colonies, and to the very large amount of capital invested in 
 the Colonies by persons in the United Kingdom, the difficulties which 
 we have indicated are to a very considerable extent confined to the 
 case of residents in this country. We think that the solution of this 
 problem lies in the proposal Avhich we are about to make. 
 
 56. Proposed appointment of agent in the United Kingdom. — ^W^e 
 reconimond the a])pointmcnt of an official resident in the United 
 Kingdom as the recognised agent of each and every Colony which 
 imposes Income Tax. It seems to us evident that such an agent 
 will be in a better position than the local official to investigate and 
 check the returns of residents in this country, and to discuss with 
 the persons concerned their various difficulties, and come to an agree- 
 ment with them where agreement is possible. If no agreement can 
 be reached, the non-resident trader will, of course, have to make his 
 ;ipj)eal in the f Colony in the usual way. 
 
 57. The: (>)louios conrerned would, in our ()i)inion, thus secure 
 .substantial benefits both in a smoother administration of their tax 
 and in a larger yield of revenue. Moreover, the existence of such 
 an officer would obviously be an advantage in relation to matters of 
 Double Income Tax.
 
 17 
 
 58. We have therefore included in our Model Ordinance a pro- 
 vision for the appointment of this agent in the United Kingdom, but 
 whether the appointment of such an agent with the necessary staff 
 is advisable will depend on the amoiint of tax estimated to be assess- 
 able annually in respect of the profits and income of companies, firms 
 and residents in the United Kingdom who are liable to pay tax in the 
 Colonies. So far as our information goes, we do not think that the 
 cost of the office of the agent in London would exceed a reasonable 
 percentage of the tax with which the agent and his staff would be 
 called upon to deal. The expense of the London office might, it is 
 suggested, be equitably shared betvv^een the Colonies, normally on the 
 basis of the assessments agreed in London for each Colony. 
 
 Double Income Tax : Intercolonial Relief. 
 
 59. The existing Colonial Ordinances provide for relief from Double 
 Income Tax as between Colonies and the United Kingdom, but few 
 of them contain a corresponding provision for giving relief as between 
 themselves and other parts of the Empire. This problem was 
 mentioned in the Report of the Sub-Committee appointed by the 
 Royal Commission*, who, in para. 34 of their Report, stated as 
 follows : — 
 
 " We are, however, authorised by all the representatives, with 
 the exception of one who preferred to wait instructions from his Govern- 
 ment before expressing an opinion, to state that they agree that the 
 suggested solution of the appropriation of the burden of the necessary 
 relief is one of which they personally approve, that they are prepared 
 to recommend it to their respective Governments, and further, that 
 the proposed relief should also be applied by the Dominions inter se 
 if applied as between the United Kingdom and the Dominions."t 
 
 60. Being convinced of the necessity of securing a imiform basis 
 of relief as between Colonies, we recommend that Colonial Govern- 
 ments be invited to adopt the system of intercolonial relief in the 
 case of Double Income Tax which we have incorporated in our 
 Model Ordinance, and which, in consonance with the proposals 
 of the Royal Commission, is based upon the same principles 
 as those imderlying the scheme already in operation between the 
 United Kingdom on the one hand and the Dominions and Colonies 
 on the other. 
 
 Administration. 
 
 6L We have already touched upon one aspect of administration 
 in our proposal in para. 56 for the appointment of a representative 
 agent in London to deal -with the assessment to Colonial Income 
 Tax of residents in the United Kingdom. With regard to the general 
 question of administration we have, as far as possible, followed 
 the existing procedure in Dominion and Colonial legislation ; thus 
 
 * Vide paragraph 43 of this Report. 
 
 f The term " Dominions " was expressly used throughout the Sub-Committee's 
 Report to include not only the self-gov^erning Dominions, but also India and 
 British possessions generally.
 
 18 
 
 provision has been made in the Model Ordinance for the appointment 
 of a Commissioner of Income Tax and of such collectors and other 
 staff as may be necessary. We realise that in many of the smaller 
 Colonies no elaborate arrangements are necessary, and that the local 
 Commissioner wiU discharge most of the duties connected with the 
 levying of the tax ; but large communities will no doubt require a 
 more highly organised administration, and in these cases it may be 
 necessary to provide the Commissioner wath a local Assessment 
 Committee to help him in his work. 
 
 62. Powers of Commissioner ; machinery for assessrnents arid for 
 appeals, etc. — We do not consider that any detailed comment is 
 required on our proposals regarding the general powers of the Com- 
 missioner or the machinery for making assessments. In providing 
 for appeals against assessments, our object has been, while limiting 
 the right of appeal on questions of fact, to place no limit to the right 
 of appeal upon questions of law. 
 
 63. In aU these matters we have done our best to maintain 
 the balance of equity between the taxing authorities on the one 
 hand and the taxpaying public on the other. We have, as a 
 rule, been guided by the principles underlying Income Tax legislation 
 in the United Kingdom, and wherever we have departed from this 
 standpoint we have done so in the belief that local conditions in the 
 Colonies called for other methods. 
 
 64. We desire to record our debt to our Secretary for his constant 
 and wilhng help in every branch of our task, in spite of the many other 
 duties incumbent on him. 
 
 G. GRINDLE {Chairman) 
 L. BROWETT 
 W. BERNARD BLATCH 
 E. A. EBORALL 
 HERBERT BRITTAIN 
 H. GRATTAN BUSHE 
 ALBERT EHRHARDT 
 
 E. B. Boyd {Secretary). 
 
 December, 1922.
 
 19 
 
 APPENDIX I. 
 
 MODEL INCOME TAX ORDINANCE. 
 
 An Ordinance to Impose a Tax upon Incomes and to Regulate the 
 Collection Thereof. 
 
 Be it enacted, etc. 
 
 1 . This Ordinance may be cited for all purposes as the Income Tax Short title. 
 Ordinance 19 . 
 
 2. In this Ordinance, unless the context otherwise requires : — Definition of 
 
 certain 
 " Commissioner " means the Commissioner charged with the general 
 
 administration of this Ordinance. terms. 
 
 " Company " means any company incorporated or registered 
 
 under any law in force in the Colony, and any company which, though 
 
 incorporated or registered outside the Colony, carries on business, or 
 
 has an office or place of business therein. 
 
 " Person " includes a body of persons. 
 
 " Body of persons " means any body politic, corporate or collegiate 
 and any company, fraternity, fellowship, or society of persons whether 
 corporate or not corporate. 
 
 " Incapacitated person " means any infant, married woman, 
 lunatic, idiot, or insane person. 
 
 " Prescribed " means prescribed by rule under this Ordinance. 
 
 " Tax " means the income tax imposed by this Ordinance. 
 
 " Year of assessment " means the period of twelve months com- 
 mencing on the ( ) day of ( ), 1923, and each subsequent 
 period of twelve months. 
 
 " Chargeable income " means the aggregate amount of the income 
 of any person from the sources specified in Section 5 remaining after 
 allowing the appropriate deductions and exemptions under this 
 Ordinance. 
 
 Administration. 
 
 3. For the due administration of this Ordinance the Governor may Appoint- 
 appoint a Commissioner and such collectors and other officers and persons admin*istra- 
 as may be necessary and shall furnish such Commissioner and collectors tive 
 with warrants of appointment under his hand. authority, 
 
 4. — (1) Every person having any official duty or being employed in Official 
 the administration of this Ordinance shall regard and deal with all docu- ®®''^^°^- 
 ments, information, returns, assessment lists and copies of such lists 
 relating to the income or items of the income of any person, as secret and 
 confidential, and shall make and subscribe a declaration in the form 
 prescribed to that effect before a Magistrate. 
 
 (2) Every person having possession of or control over any documents, 
 information, returns or assessment lists or copies of such lists relating to the
 
 20 
 
 income or items of income of any person, who at any time communicates or 
 attemjDts to communicate such information or anything contained in such 
 documents, returns, lists, or copies to any person — 
 
 (fl) other than a person to whom he is authorised by the Governor to 
 
 communicate it ; or 
 (b) otherwise than for the purposes of this Ordinance, 
 shall be guilty of an offence against this Ordinance. 
 
 Charge of 
 Income Tax. 
 
 Basis of 
 assessment. 
 
 Special 
 I>eriod8 of 
 assessment. 
 
 Imposition of Income Tax. 
 
 5. Income tax shall, subject to the provisions of this Ordinance, 
 be payable at the rate or rates specified hereafter for the year of assess- 
 ment commencing on ( ) 1923 and for each subsequent 
 year of assessment upon the income of any person accruing in, derived 
 from, or received in, the Colony in respect of : — 
 
 (a) gains or profits from any trade, business, profession or vocation, 
 for whatever period of time such trade, business, profession, 
 or vocation may have been carried on or exercised ; 
 
 (6) gains or profits from any employment, including the estimated 
 annual value of any quarters or board or residence or of any 
 other allowance granted in respect of employment whether in 
 money or otherwise ; 
 
 (c) the annual value of land and improvements thereon used by or on 
 behalf of the owner or used rent-free by the occupier, for the 
 purpose of residence or enjoyment, and not for the purpose of 
 gain or profit, such annual value being deemed to be [5] per 
 cent, of the capital value of such land and improvements ; 
 
 (cZ) dividends, interest or discounts ; 
 
 (e) any pension, charge or annuity ; 
 
 if) rents, royalties, premiums and any other profits arising from 
 property. 
 
 6. Tax shall be charged, levied and collected for each year of assess- 
 ment upon the chargeable income of any person for the year immediately 
 preceding the year of assessment. 
 
 7. Where the Commissioner is satisfied that any person usually makes 
 up the accounts of his trade or business on some day other than that 
 immediately preceding any year of assessment, the Commissioner may 
 permit the gains or profits of that trade or business to be computed for 
 the purposes of this Ordinance upon the income of the year terminating 
 on that day in the year immediately preceding the year of assessment on 
 which the accounts of the said trad(! or business have been usually made up. 
 
 Exemptions. 
 ^.—(1) There shall be exempt from the tax :— 
 Exeiiiptwns. (a) the official emoluments received by the Officer Administering the 
 
 Government ; 
 {h) the income of any local authority in so far as such income is not 
 derived from a trade or business carried on by the local 
 authority ; 
 (r) the income of any statutory or registered building or friendly 
 
 Boc.'u'.iy ; 
 ('/) tiie income of ;iny ecclesiastical, cliarilal^ie or educational institu- 
 tion of a public cliaracter in ho far as such income is not derived 
 from u trade or business carried on by such institution ;
 
 21 
 
 (p) the emoluments payable to members of the permanent consular 
 services of foreign countries in respect of their offices or in 
 respect of services rendered by theni in their official capacity ; 
 (/) the emoluments payable from Imperial Funds to members of 
 His Majesty's Forces and to persons in the permanent service 
 of the Imperial Government in the Colony in respect of their 
 offices under the Imperial Grovernment ; 
 (g) wound and disability pensions granted to members of His Majesty's 
 
 Forces ; 
 (h) gratuities granted to members of His Majesty's Forces in respect 
 
 of services rendered during the late War ; 
 {i) the income of the Government Savings Bank ; 
 provided that nothing in this section shall be construed to exempt in the 
 hands of the recipients any dividends, interest, bonuses, salaries or wages 
 paid wholly or in part out of the income so exempted. 
 
 9. The Governor may by proclamation published in the Gazette Govemmeub 
 provide that the interest payable on any loan charged on the Public Loans. 
 Revenue of the Colony shall be exempted from the tax, either generally 
 or only in respect of interest payable to persons not resident in the Colony ; 
 and such interest shall as from the date and to the extent specified in the 
 Proclamation be exempt accordingly. 
 
 Ascertainmeyit of chargeable income. 
 
 10. — (1) For the purpose of ascertaining the chargeable income of any Deductions 
 person there shall be deducted all outgoings and expenses wholly and '''^o^^^- 
 exclusively incurred during the year preceding the year of assessment 
 by such person in the production of the income, including — 
 
 [a) sums payable by su.ch person by way of interest upon any money 
 borrowed by him, where the Commissioner is satisfied that the 
 interest was payable on capital employed in acquiring the 
 income ; 
 
 (6) rent paid by any tenant of land or buildings occupied by him 
 for the purpose of acquiring the income ; 
 
 (c) where any person engaged in any trade, business, profession or 
 vocation has expended any sum in replacing any plant or 
 machinery which was used or em^jloyed in such trade, business, 
 profession or vocation, and which has become obsolete, an 
 amount equivalent to the cost of the machinery replaced, after 
 deducting from that cost such sum as shall represent the 
 total depreciation which has occurred by reason of exhaustion 
 or wear and tear since the date of purchase of such plant and 
 machinery and any sum realised by the sale thereof ; 
 
 {d) any sum expended for repair of premises, plant and machinery 
 employed in acquiring the income, or for the reziewal, 
 repair or alteration of any implement, utensil or article so 
 employed ; 
 
 {e) bad debts incurred in any trade, business, profession or vocation, 
 proved to the satisfaction of the Commissioner to have become 
 bad during the year immediately preceding the year of assess- 
 ment, and doubtful debts to the extent that they are respec- 
 tively estimated to the satisfaction of the Commissioner to 
 have become bad during the said year notwithstanding that 
 such bad or doubtful debts were due and payable prior to the 
 commencement of the said year, provided that all sums re- 
 covered during the said year on account of amounts previously
 
 22 
 
 Allowance 
 for -wear and 
 tear. 
 
 Deductions 
 not to be 
 allowed. 
 
 Allowance of 
 trade losses. 
 
 DcdiK'tioii 
 rcsjiCf t of 
 earned 
 income. 
 
 written off or allowed in respect of bad or doubtful debts shall 
 for the purposes of this Ordinance be treated as receipts of the 
 trade, business, profession or vocation for that year ; 
 (/) Such other deductions as may be prescribed by any rule made 
 
 under this Ordinance. 
 (2) The Governor in Council may by rules provide for the method of 
 calculating or estimating the deductions allowed or prescribed under this 
 section. 
 
 11. In ascertaining the chargeable income of any person engaged in a 
 trade, business, profession or vocation, there shall be allowed as a deduction 
 a reasonable amount for the exhaustion, wear and tear of property owned 
 by him, including plant and machinery, arising out of the use or employ- 
 ment of such property in the trade, business, profession or vocation during 
 the year immediately preceding the year of assessment. 
 
 12. For the purpose of ascertaining the chargeable income of any 
 person no deduction shall be allowed in resj^ect of : — 
 
 (a) domestic or private expenses ; 
 
 (6) any disbursements or expenses not being money wholly and 
 
 exclusively laid out or exj)ended for the j)urpose of acquiring 
 
 the income ; 
 
 (c) any capital withdrawn or any sum employed or intended to be 
 
 employed as capital ; 
 
 (d) any capital employed in improvements ; 
 
 (e) any sum recoverable under an insurance or contract of indemnity ; 
 (/) rent of or cost of repairs to any premises or part of premises 
 
 not paid or incurred for the purpose of producing the income ; 
 (g) any amounts paid or payable in respect of the United Kingdom 
 income tax or super-tax or Empire income tax as defined by 
 this Ordinance. 
 
 13. Where the amount of a loss incurred in the year preceding any year 
 of assessment in any trade, business, profession or vocation carried on 
 by any person eitlier solely or in partnership is such that it cannot be 
 wholly set-ofi against his income from other sources for the same year, 
 the amount of such loss shall to the extent to which it is not allowed 
 against his income from other sources for the same year be carried forward 
 and shall, subject as is hereinafter provided, be set-of? against what would 
 otherwise have been his chargeable income for the next five years in 
 succession, provided that the amount of any such loss allowed to be get 
 off in computing the chargeable income of any year shall not be set-off in 
 computing the chargeable income of any other year and provided also 
 that in no case shall such set-off be allowed to an extent which would 
 reduce the tax payable for any year of assessment to less than one-half 
 of the amount which would have been payable had the set-off not been 
 allowed. 
 
 14. — (1) For th(! ])urposc of ascertaining the chargeable income of any 
 individual there shall be allowed in res])ect of so much of the income as is 
 earned a sum equal to (one-tenth) of the amount of such earned income, 
 provid(!d that such deduction shall not in the case of any individual exceed 
 (£200) ; and provided also that where a loss arises in the exercise of any 
 lrad«', busincsH, profession, or vocation or a loss is brought forward from a 
 previous year under section thirteen of this Ordinance, no deduction shall be 
 ullowr-d cxcciit in respect of the amount, if any, by which the earned 
 inccjiiie cxcccdH such loss or the aggregate amount of such losses as the 
 case may be. 
 
 (2) For the purposes of this section the expression " earned income"
 
 23 
 
 means any income arising in respect of any gains or profits imme- 
 diately derived by the individual from any trade, business, profession, 
 employment or vocation carried on or exercised by him either as an indi- 
 vidual or in the case of a partnership as a partner personally acting therein, 
 or in respect of any pension, superannuation, or other allowance given in 
 respect of past services of the individual or of the husband or parent of 
 the individual or given to the individual in respect of the past services of 
 any deceased person whether the individual or husband or parent of the 
 individual shall have contributed to such pension, superannuation or other 
 allowance or not ; after deducting the expenses referred to in sections ten 
 and eleven of this Ordinance, but before allowing the other deductions to 
 be made in arriving at chargeable income. 
 
 15. In ascertaining the chargeable income of an individual who is Deduction in 
 
 resident in the Colony or who is a British subject, there shall be allowed c^^.^°^ . 
 T T , ■ e n J ' residents in 
 
 a deduction of £ . tlie Colony 
 
 and British 
 Subjects. 
 
 16. In ascertaining the chargeable income of an individual who proves Deduction 
 to the satisfaction of the Commissioner that he had during the year imme- for Wife, 
 diately preceding the year of assessment his wife living with him or wholly 
 maintained by him there shall be allowed a deduction of £ : 
 provided that this deduction shall not be allowed in the case of any indi- 
 vidual whose chargeable income would, apart from the deductions specified 
 
 in this and the next section, exceed [£500]. 
 
 17. In ascertaining the chargeable income of an individual who proves Deduction 
 to the satisfaction of the Commissioner that he had a child or children for Children, 
 living and under the age of sixteen years at the commencement of the year 
 preceding the year of assessment, there shall be allowed a deduction of £ 
 
 in respect of every such child ; provided that this deduction shall not be 
 allowed in the case of any individual whose chargeable income would, 
 apart from the deductions specified in this and the last preceding section, 
 exceed [£500]. 
 
 The expressions " child " and " children " in this section include a 
 step-child or step-children but do not include an illegitimate child or 
 illegitimate children. 
 
 18. In ascertaining the chargeable income of any person who («) shall Deduction in 
 have made insurance on his life or the life of his wife in any Insurance respect of life 
 Company or, (b) shall have made annual contribution to the Widows' and insurance, and 
 Orphans' Fund in the Colony or such other Fund as the Grovernor may to Widows' 
 consider as equivalent to a Widows' and Orphans' Fund, there shall be and Orphans' 
 allowed a deduction of the annual amount of the premium paid by him Fund. 
 
 for such insurance or contribution as aforesaid : provided that no such 
 deduction shall be allowed in respect of any such annual amount of premium 
 or contribution beyond an amount equal to one-sixth part of the chargeable 
 income of such person estimated in accordance with the provisions of this 
 Ordinance before making the deductions specified in this section and in 
 sections sixteen and seventeen of this Ordinance. 
 
 19. Notwithstanding anything to the contrary contained in this Special pro- 
 Ordinance, it is hereby j)rovided that : — visions as to 
 
 (1) in the case of an Insurance Company (other than a Life Insurance certain com- 
 
 Company) where the gains or profits accrue in part outside the I'^'ii^^ ^'i" 
 
 dusiugssgs 
 Colony, the gains or profits on which tax is payable shall be 
 
 ascertained by taking the gross premiums and interest and other Compani'^s'^^^ 
 
 income received or receivable in the Colony (less any premiums other than 
 
 returned to the insured and premiums paid on re-insurances). Life Insur- 
 
 and deducting from the balance so arrived at a reserve for ^^^ 
 
 unexpired risks at the percentage adopted by the Company o^^P^i^i^^-
 
 24 
 
 (2) Life 
 
 Insurance 
 
 Companies. 
 
 Wife's 
 Income. 
 
 Rates of tax 
 upon persons 
 other than 
 companies. 
 
 Flat rate of 
 tax on 
 company. 
 Deduction of 
 tax from 
 dividends of 
 companies. 
 
 in relation to its operations as a whole for such risks at the 
 end of the year preceding the year of assessment, and adding 
 thereto a reserve similarly calculated for unexpired risks out- 
 standing at the commencement of the year preceding the year 
 of assessment, and from the net amount so arrived at deducting 
 the actual losses (less the amount recovered in respect thereof 
 under re-insurance), the agency expenses in the Colony and a 
 fair proportion of the expenses of the head office of the 
 Company : 
 (2) In the case of a Life Insurance Com^jany, whether mutual or pro- 
 prietary, the gains or profits on which tax is payable shall be 
 the investment income less the management expenses (including 
 commission) ; j^rovided that where such a Company received 
 premiums oiitside the Colony, the gains or profits shall be the 
 same proportion of the total investment income of the Company 
 as the premiums received in the Colony bore to the total 
 premiums received after deducting from the amount so arrived 
 at the agency expenses in the Colony and a fair proportion of 
 the expenses of the head office of the Company. 
 
 20. The income of a married woman living with her husband shall, 
 for the purposes of this Ordinance, be deemed to be the income of the 
 husband, and shall be charged in the nanie of the husband and not in her 
 name nor in that of her trustee, provided that that part of the total amount 
 of tax charged upon the husband which bears the same proportion to that 
 total amount as the amount of the income of the wife bore to the amount 
 of the total income of the husband and wife may, if necessary, be collected 
 from the wife, notwithstanding that no assessment has been made upon 
 her. 
 
 Rate of tax. 
 
 21. The tax upon the chargeable income of every person other than a 
 company shall be charged at the following rates : — 
 
 For every pound of the first £ 
 
 For every pound of the next £ 
 
 For every j)ound of the next £ 
 
 [and so on for every pound of the remainder]. 
 
 22. The tax upon the chargeable income of a company shall be charged 
 at the rate of on every £ of the chargeable income thereof. 
 
 23. — (1) Every company which is registered in the Colony shall be 
 entitled to deduct from- the amount of any dividend paid to any share- 
 holder tax at the rate paid or payable by the company (as reduced by any 
 relief granted under sections forty-six and forty-seven of this Ordinance) 
 on the income out of which such dividend is ])aid, provided that where 
 tax is not paid or ])ayable by the company on the whole income out of 
 which the dividend is i)aid the deduction shall be restricted to that portion 
 of the dividend which is ])aid out of income on which tax is paid or payable 
 by the comi)any. 
 
 (2) Every such company shall u])on ])aynient of a dividend whether 
 lax is deducted therefrom or not furnish each shareholder with a certificate 
 .setting fort li 1li(! anioiiiit of th(! dividend paid to that shareholder and 
 the aiiiomit of tux wliicli tlie coni])any has deducted or is entitled to deduct 
 in respect of that dividend. 
 
 24. Any tax which a company has deducted or is entitled to deduct 
 under the last preceding H(!ction from a dividend paid to a shareholder, 
 and any tax applicable to the share to which any person is entitled in the 
 income of a body of persons assessed under this Ordinance, shall, when 
 Huch dividend or share is in< bided in the chargeable income of such share-
 
 25 
 
 holder or person, be set off for the purposes of collection against the tax 
 charged on that chargeable income. 
 
 25. Tax shall not be payable in respect of any income arising out of the Temporary 
 Colony and received therein by any person who is in the Colony for some residents, 
 temporary purpose only and not with any intent to establish his residence 
 therein and who has not actually resided in the Colony at one or more 
 
 times for a period equal in the whole to six months in the year preceding 
 the year of assessment. 
 
 Trustees, Agents, etc. 
 
 26. A receiver appointed by the Court, trustee, guardian, curator, Chargeability 
 or committee, having the direction, control, or management of any property of Trustees, 
 or concern on behalf of any incapacitated person shall be chargeable to tax ®*'^- 
 
 in like manner and to the like amount as such person would be chargeable 
 if he were not an incapacitated person. 
 
 27. — (1) A person not resident in the Colony (hereinafter in this section Chargeability 
 referred to as a non-resident person), whether a British subject or not, of agent of 
 shall be assessable and chargeable in the name of his trustee, guardian, person 
 or committee, or of any attorney, factor, agent, receiver, branch, or ^^^V"^, 'I""' 
 manager, whether such attorney, factor, agent, receiver, branch, or manager 
 has the receipt of the income or not, in like manner and to the like amount 
 as such non-resident person would be assessed and charged if he were 
 resident in the Colony and in the actual receipt of such income ; provided 
 that in the case of any individual who is not resident in the Colony, and 
 who is not a British subject, no deduction shall be allowed in respect of 
 earned income or in respect of wife or child or in respect of life insurance. 
 
 A non-resident person shall be assessable and chargeable in respect 
 of an)'' income arising, Vv'hether directly or indirectly, through or from any 
 attorneyship, factorship, agency, receivershi]), branch, or management, 
 and shall be so assessable and chargeable in the name of the attorney, 
 factor, agent, receiver, branch, or manager. 
 
 (2) Where a non-resident person, not being a British subject, or a 
 firm or company whose principal place of business is situated in His 
 Majesty's Dominions or in territory under His Majesty's protection, or a 
 branch thereof, carries on business with a resident person, and it appears 
 to the Commissioner that owing to the close connection between the 
 resident person and the non-resident person and to the substantial control 
 exercised by the non-resident person over the resident person, the course 
 of business between those persons can be so arranged and is so arranged, 
 that the business done by the resident person in pursuance of his connec- 
 tion with the non-resident person j)roduces to the resident jjerson either 
 no profits or less than the ordinary profits which might be expected to 
 arise from that business, the non-resident person shall be assessable and 
 chargeable to tax in the name of the resident person as if the resident 
 perso^n were an agent of the non-resident person. 
 
 (3) Where it appears to the Commissioner by whom the assessment is 
 made, or to the Judge by whom an appeal is heard, that the true amount 
 of the gains or profits of any non-resident person chargeable with tax in 
 the name of a resident person cannot in any case be readily ascertained, 
 the Commissioner or Judge may, if he thinks fit, assess and charge the 
 non-resident person on a fair and reasonable percentage of the turnover 
 of the business done by the non-resident person through or with the 
 resident person in whose name he is chargeable as aforesaid, and in such 
 case the provision of this Ordinance relating to the delivery of returns or 
 particulars by persons acting on behalf of others shall extend so as to 
 require returns or particulars to be furnished by the resident person of 
 the business so done by the non-resident person through or with the
 
 26 
 
 resident person, in the same manner as returns or particulars are to be 
 delivered by persons acting for incapacitated or non-resident persons of 
 income to be charged ; provided that the amount of the percentage shall 
 in each case be determined, having regard to the nature of the business 
 and shall, when determined by the Commissioner, be subject to an appeal 
 to a Judge as provided by section forty-four of this Ordinance. 
 
 (4) Nothing in this section shall render a non-resident person charge- 
 able in the name of a broker or general commission agent or other agent 
 where such broker, general commission agent or agent is not an authorised 
 person carrying on the regular agency of the non-resident person, or a 
 person chargeable as if he were an agent in pursuance of sub-sections (2) 
 and (3) of this section, in respect of gains or profits arising from sales 
 or transactions carried out through such a broker or agent. 
 
 (5) The fact that a non-resident person executes sales or carries out 
 transactions with other non-residents in circumstances which woidd make 
 him chargeable in pursuance of sub-sections (2) and (3) of this section 
 in the name of a resident person shall not of itself make him chargeable 
 in respect of gains or jirofits arising from those sales or transactions. 
 
 (6) Where a non-resident person is chargeable to tax in the name of 
 any attorney, factor, agent, receiver, branch or manager, in respect of 
 any gains or profits arising from the sale of goods or produce manufactured 
 or produced out of the Colony by the non-resident person, the person in 
 whose name the non-resident person is so chargeable may, if he thinks fit, 
 apply to the Commissioner or, in tlie case of an appeal, to the Judge, to have 
 the assessment to tax in respect of those gains or profits made or amended 
 on the basis of the profits which might reasonably be expected to have 
 been earned by a merchant or, where the goods are retailed by or on 
 behalf of the manufacturer or producer, by a retailer of the goods sold, 
 who had bought from the manufacturer or producer direct, and on proof 
 to the satisfaction of the Commissioner or Judge of the amount of the 
 profits on the basis aforesaid, the assessment shall be made or amended 
 accordingly. 
 
 Acts, etc., to 28. The j^erson who is chargeable in respect of an incapacitated person, 
 be done by or in whose name a non-resident is chargeable, shall be answerable for all 
 trustees, etc. ^^latters required to be done by virtue of this Ordinance for the assessment 
 of the income of any person for whom he acts and for paying the tax 
 chargeable thereon. 
 l.i.-it.s to bf 29. Every ])erson who in whatever cajiacity is in receipt of any money 
 
 prepared by or value being income arising from any of the sources mentioned in this 
 representa- Ordinance of or belonging to any other person who is chargeable in respect 
 ' ■ tlieroof, or who would be so cliargeable if he were resident in the Colony 
 and not an incapacitated person shall, whenever required to do so by any 
 ))otice from the Commissioner, prepare and deliver within the period 
 mentioned in such notice a list in the prescribed form, signed by him, con- 
 taining — 
 
 (a) a true iuid correct statement of all sucli income : 
 (h) tlif uaiiic and address of every ])erson to whom the same shall 
 lM'h>iig : 
 
 and the itrovisions of this Ordinance with respect to the failure to deliver 
 lists or parti(!ular8 in actcordancc with a notice from the Commissioner 
 shall ai»|)ly to any such list. 
 MdimgfTof •'i''- '''i*' iriauagcr or other principal olliccr of cvcvy corpoiate body of 
 
 cor[)orntc perHOHH shall he uiiswerable for doing all such acts, matters and things as 
 bodif-H of ,jr,. ref|uired t(» be done by virtue of this Ordinance for the assessment 
 
 pcfHons. ^j ^^^j^ body and payment of the tax.
 
 27 
 
 31. Every person answerable under this Ordinance for the payment Indemnifica- 
 of tax on behalf of another person may retain out of any money coming ^^^^ '^{ repre- 
 to his hands on behalf of such other person so much thereof as shall be ^^^ ^ '^®' 
 sufficient to pay such tax ; and shall be and is hereby indemnified against 
 
 any person whatsoever for all payments made by him in pursuance and by 
 virtue of this Ordinance. 
 
 32. When any jDerson dies during the year preceding the year of assess- Deceased 
 ment and such person would but for his death have been chargeable to persons, 
 tax for the year of assessment or when any person dies during the year of 
 assessment or within two years after the expiration thereof and no assess- 
 ment has been made upon him for that year the personal representative 
 
 of such person shall be liable to and charged with the payment of the 
 tax with which such person would have been chargeable, and shall be 
 answerable for doing all such acts, matters and things as such person if 
 he were alive would be liable to do under this Ordinance, provided that in 
 the case of a person dying during the year preceding the year of assess- 
 ment if his personal representative distributes his estate before the com- 
 mencement of the year of assessment such personal representative shall 
 pay the tax at the rate or rates in force at the date of distribution of the 
 estate, if the rate of tax for the year of assessment has not been fixed at 
 that date. 
 
 33. — (1) Where an}' person pays mortgage or debenture interest to a Deduction 
 person not resident in the Colony and is entitled to deduct such interest of and 
 under section ten (i)(a) of this Ordinance, he shall upon paying the interest ^ccountmg 
 deduct therefrom tax at the rate of on every £ of such i^ortgage and 
 
 interest, and shall forthwith render an account to the Commissioner of debenture 
 the amount so deducted, and every such amount shall be a debt from him interest, 
 to the Government of the Colony and shall be recoverable as such. 
 
 (2) In the case of a company the account aforesaid shall be rendered 
 by the manager or other principal officer of the company. 
 
 (3) Any person who fails or neglects to render an account due under 
 this section, shall be guilty of an ofience against this Ordinance. 
 
 General Powers of Commissioner. 
 
 34. — (1) It shall be the duty of every person chargeable with tax to Notices of 
 give notice to the Commissioner within three months after the commence- chargeability 
 ment of any year of assessment that he is so chargeable. *^^^ returns. 
 
 (2) The Commissioner may by notice in writing require any person 
 to furnish him within a reasonable time with a return of income and 
 such particulars as may be required for the purposes of this Ordinance 
 with respect to the income for which such person is chargeable. 
 
 (3) Any person who fails or neglects to give such notice of chargeability 
 or to furnish such return or particulars shall be guilty of an offence against 
 this Ordinance. 
 
 35. — (1) The Commissioner may require any officer in the employment Official infor- 
 of the Government or any municipality or other public body to supply mation and 
 such particulars as may be required for the purposes of this Ordinance official 
 and which may be in the possession of such officer, provided that no such ^^^^^^y- 
 officer shall by virtue of this section be obliged to disclose any particulars 
 as to which he is under any statutory obligation to observe secrecy. 
 
 (2) Every emjsloyer when required to do so by notice from the Com- 
 missioner shall, within the time limited by the notice, j)repare and deliver 
 for any year a return containing — 
 
 (a) the names and j)laces of residence of all persons employed by him ; 
 and
 
 28 
 
 (b) tlie i^ayments and allowances made to- those persons in respect 
 of that employment, except persons who are not employed in 
 any other employment and whose remuneration in the employ- 
 ment for the year does not exceed £ ; 
 
 and the provisions of this Ordinance with respect to the failure to deliver 
 returns or particulars in accordance with a notice from the Commissioner 
 shall apply to any such return. 
 
 Provided that an employer shall not he liable to any penalty for 
 omitting from any such return the name or place of residence of any 
 person employed by him and not employed in any other employment if 
 it appears to the Commissioner, on enquiry, that such person has no 
 chargeable income. 
 
 (3) Where the employer is a body of persons the manager or other 
 principal officer shall be deemed to be the employer for the purposes of 
 this section, and any director of a com^^any, or person engaged in the 
 management of a company, shall be deemed to be a person employed. 
 
 36. Where a trade, business, profession or vocation is carried on by 
 two or more persons jointly — 
 
 (1) The income of any partner from the partnership shall be deemed 
 to be the share to which he was entitled during the year preceding the year 
 of assessment in the income of the partnership (such income being ascer- 
 tained in accordance with the provisions of this Ordinance) and shall be 
 included in the return of income to be made by such partner under the 
 jjrovisions of this Ordinance. 
 
 (2) — (a) The precedent partner, that is to say, the partner who of the 
 partners resident in the Colony — 
 
 (i) is first named in the agreement of partnership ; or 
 (ii) if there be no agreement is named singly or with precedence to 
 
 the other partners in the usual name of the firm ; or 
 (iii) is the precedent acting partner if the partner named with prece- 
 dence is not an acting partner ; 
 
 shall, when required by the Commissioner, make and deliver a return of 
 the income of the partnership for any year, such income being ascertained 
 in accordance with the provisions of this Ordinance, and declare therein 
 the names and addresses of the other partners in the firm together with 
 the amount of the share of the said income to which each partner was 
 entitled for that year. 
 
 (h) Where no partner is resident in the Colony, the return shall bo 
 made and delivered by the attorney, agent, manager or factor of the firm 
 resident in the Colony. 
 
 (c) The provisions of this Ordinance with respect to the failure to 
 deliver returns or particulars in accordance with a notice from the Commis- 
 sioner shall apj)ly to any return required under this section. 
 
 37. — (1) Every notice to be given by the Commissioner under this 
 Ordinance shall be signed by the Commissioner or by some person or 
 persons from time to time appointed by him for that purpose, and every 
 such notice shall be valid if the signature of the Commissioner or of such 
 j)er8on or persons is duly ])rinted or written thereon, provided that any 
 notice ill writing under this Ordinance to any person reijuiring him to furnish 
 particulars to the Coniiuissioner, or any notice under this Ordinance 
 rcfpiiriiig the attendance of iiriy person or witness before the Commissioner, 
 shall Id- personally sigrnd hy the Coniiuissioner or by aiiy person duly 
 autiiorised hy him.
 
 29 
 
 (2) A signature attached to any notice and purporting to be the 
 signature of any person so appointed shall be taken to be the signature of 
 that person until the contrary be shown. 
 
 38. Notice may be served on a person either personally or by being Service of 
 sent through registered post to his last known business or private address, notices. 
 and shall in the latter case be deemed to have been served, in the case of 
 persons resident in the Colony, not later than the 
 
 day succeeding the day when posted, and in the case of persons not so 
 resident the day succeeding the day on which the notice 
 
 would have been received in the ordinary course by post, and in proving 
 such service it shall be sufficient to prove that the letter containing the 
 notice was properly addressed and posted. 
 
 Assessments. 
 39. — (1) The Commissioner shall proceed to assess every person charge- Coramis- 
 able with the tax as soon as may be after the expiration of the time allowed ^^°^^^ *° 
 to such person for the delivery of his return. assessments. 
 
 (2) Where a person has delivered a return the Commissioner may — 
 
 (a) accept the return and make an assessment accordingly : or 
 
 (6) refuse to accept the return and, to the best of his judgment,. 
 
 determine the amount of the chargeable income of the person 
 
 and assess him accordingly. 
 
 (3) Where a person has not delivered a return and the Commissioner 
 is of the opinion that such person is liable to pay tax, he may, according 
 to the best of his judgment, determine the amount of the chargeable 
 income of such person and assess him accordingly, but such assessment 
 shall not affect any liability otherwise incurred by such person by reason 
 of his failure or neglect to deliver a return. 
 
 40. Where it appears to the Commissioner that any person liable to Additional 
 tax has not been assessed or has been assessed at a less amount than that assessments. 
 which ought to have been charged, the Commissioner may, within the 
 year of assessment or within two years after the expiration thereof, assess 
 such person at such amount or additional amount, as according to his judg- 
 ment ought to have been charged, and the provisions of this Ordinance 
 as to notice of assessment, appeal and other proceedings under this Ordi- 
 nance shall apply to such assessment or additional assessment and to the 
 tax charged thereunder. 
 
 41. — (1) The Commissioner shall as soon as possible prejDare lists of Lists of 
 persons assessed to tax. persons 
 
 (2) Such lists (herein called the assessment lists) shall contain the names ^^oticS of^" 
 and addresses of the persons assessed to tax, the amount of the chargeable assessment. 
 income of each person, the amount of tax payable by him, and such other 
 particulars as may be prescribed. 
 
 42. For the purpose of facilitating the assessment of the income of Appointment 
 persons residing in the United Kingdom the Governor may appoint an o^ -^§®^* ^^ 
 agent in the United Kingdom who shall make enquiries on behalf of the j^^^o-^ji^jQ 
 Commissioner in respect of any such person as may apply to be dealt 
 with through such agent, and shall ascertain and report to the Commis- 
 sioner the amount of the chargeable income of such person in accordance 
 with this Ordinance and shall forward to the Commissioner the accounts 
 and computations upon which his report is based. The Commissioner on 
 receipt of the report shall enter the amount reported in the assessment 
 list ; provided that if it appears to the Commissioner that any error has 
 occurred in the accounts or computation he may refer the report back 
 for further consideration ; and provided also that nothing in this section
 
 30 
 
 Power of 
 Commis- 
 sioner to 
 revise assess- 
 ment in case 
 
 shall prevent the appeal to a Judge in the Colony conferred by section 
 forty-four of this Ordinance. 
 
 43. — (1) The Commissioner shall cause to be served personally on or 
 sent by registered post to each person whose name appears on the assess- 
 ment lists a notice addressed to him at his usual jilace of abode or business, 
 stating the amount of his chargeable income and the amount of tax pay- 
 of objection, able by him, and informing him of his rights under the next sub-section. 
 
 (2) If any person disputes the assessment he may apply to the Com- 
 missioner, by notice of objection in writing, to review and to revise the 
 assessment made upon him. Such application shall state precisely the 
 grounds of his objections to the assessment and shall be made within 
 fifteen days from the date of the service of the notice of assessment, pro- 
 vided that the Commissioner, upon being satisfied that owing to absence 
 from the Colony, sickness or other reasonable cause, the person dis- 
 puting the assessment was prevented from making the application within 
 such period, shall extend the period as may be reasonable in the circum- 
 stances. 
 
 (3) On receipt of the notice of objection referred to in sub-section (2) 
 of this section, the Commissioner may require the person giving the notice 
 of objection to furnish such particulars as the Commissioner may deem 
 necessary with respect to the income of the person assessed and to produce 
 all books or other documents in his custody or under his control relating to 
 such income, and may summon any person who, he thinks, is able to give 
 evidence respecting the assessment to attend before him and may examine 
 such person (except the clerk, agent, servant, or other person confidentially 
 employed in the affairs of the person to be charged) on oath or otherwise. 
 
 (4) In the event of any person assessed, who has objected to an assess- 
 ment m.ade upon him, agreeing with the Commissioner as to the amount 
 at which he is liable to be assessed, the assessment shall be amended 
 accordingly, and notice of the tax payable shall be served upon such 
 person : 
 
 Provided always that in the event of any person who, under sub- 
 section (2) of this section, has applied to the Commissioner for a revision 
 of the assessment made upon him failing to agree with the Commissioner 
 as to the amount at which he is liable to be assessed his right of appeal 
 to a Judge under the provisions of this Ordinance, against the assessment 
 made upon him, shall remain unimpaired. 
 
 44. — (1) Any person who, being aggrieved by an assessment made 
 upon him, has failed to agree with the Commissioner in the manner pro- 
 vided in subsection (4) of the preceding section may appeal against the 
 assessment to a Judge upon giving notice in writing to the Commissioner 
 within fifteen days from the date of the refusal of the Commissioner to 
 amend the assessnient as desired : 
 
 Provided that, notwithstanding the lapse of such period of fifteen days, 
 any penson may ajjpeal against the said assessment if he shows to the 
 Batisfaction of a Judge that, owing to absence from the Colony, sickness or 
 other reasonable cause he was ])revented from giving notice of appeal 
 witliin such pciriod, and that there has been no unreasonable delay on his 
 part, 
 
 (2) Every person aj)j)('aling sliall attend before the Judge in person 
 on f lie day and at tlic time fixed for the hearing of liis a])])eal : 
 
 Provided always tiiat if it bo proved to the satisfaction of the Judge 
 that owing to absence from the Colony, sickness, or other reasonable cause, 
 any person is ])reventcd from attending in person at the hearing of his 
 apj)eul on tlie (lay and at tlie time fixed for that purpose, the Judge may 
 postpone flif! Inarijig of tlic; aiipcal for sucli reasonable time fis he thinks 
 
 Appeals 
 against 
 assessments
 
 31 
 
 necessary for the attendance of the appellant, or he may admit the appeal 
 to be made by any agent, clerk or servant of the appellant, on his behalf. 
 
 (3) Seven clear days' notice shall, unless rules made hereunder other- 
 wise i^rovide, be given to the Commissioner of the date fixed for the hearing 
 of the appeal. 
 
 (4) The onus of proving that the assessment complained of is excessive 
 shall be on the appellant. 
 
 (5) If the Judge is satisfied that the appellant is overcharged he may 
 reduce the amount of the assessment by the amount of the overcharge, 
 and if he is satisfied that the appellant is undercharged he may increase 
 the amount of the assessment by the amount of the undercharge. 
 
 (6) Notice of the amount of tax payable under the assessment as 
 determined by the Judge shall be served by the Commissioner upon the 
 appellant. 
 
 (7) All appeals shall be heard in camera, unless the Judge shall, on 
 the application of the appellant, otherwise direct. 
 
 (8) The costs of the appeal shall be in the discretion of the Judge 
 hearing the appeal and shall be a sum fixed by the Judge. 
 
 (9) The decision of the Judge hearing- the appeal shall be final ; pro- 
 vided that the Judge hearing such appeal may, if he so desires, and shall, 
 on the application of the appellant or the Commissioner, state a case on a 
 question of law. 
 
 (10) The Chief Justice may make rules governing such appeals and 
 providing for the method of tendering evidence and appointing places 
 for the hearing of such appeals and prescribing the procedure to be followed 
 on a case being stated. 
 
 45. — (1) No assessment, warrant or other proceeding purporting to be Errors, etc., 
 made in accordance with the provisions of this Ordinance shall be quashed, in assessments 
 or deemed to be void or voidable, for want of form, or be affected by the ^^^ notices, 
 reason of a mistake, defect or omission therein, if the same is in substance 
 and effect in conformity with or according to the intent and meaning of 
 this Ordinance or any Ordinance amending the same, and if the person 
 assessed or intended to be assessed or affected thereby is designated therein 
 according to common intent and understanding. 
 
 (2) An assessment shall not be impeached or affected 
 
 (a) by reason of a mistake therein as to : — 
 
 (i) the name or surname of a person liable ; or, 
 (ii) the description of any income ; or 
 (iii) the amount of tax charged ; 
 
 (b) by reason of any variance between the assessment and the notice 
 
 thereof. 
 
 Provided that in cases of assessment the notice thereof shall be duly 
 served on the person intended to be charged and such notice shall contain, 
 in substance and effect, the particulars on which the assessment is made. 
 
 Relief in Cases of Double Taxation. 
 
 46.- — (1) Any person who has paid, by deduction or otherwise, or is Relief in 
 liable to pay, tax under this Ordinance for any year of assessment on any respect of 
 part of his income and who proves to the satisfaction of the Commissioner -X?^*®, 
 that he has j^aid, by deduction or otherwise, or is liable to pay, income tax income Tax. 
 in the United Kingdom for that year in respect of the same part of his 
 income, shall be entitled to relief from tax under this Ordinance paid or 
 payable by him on that part of his income at a rate equal to the amount 
 by which the rate of tax appropriate to his case under this Ordinance 
 exceeds half the appropriate rate of United Kingdom tax. If, however,
 
 32 
 
 Relief in 
 reapect of 
 Empire 
 Income Tax. 
 
 the rate of tax apijropriate to his case under this Ordinance exceeds the 
 appropriate rate of United Kingdom tax he shall be entitled only to relief 
 at a rate equal to half the appro])riate rate of United Kingdom tax. 
 
 (2) For the pur^^oses of this section a certificate issued by or on behalf 
 of the Commissioners of Inland Revenue in the United Kingdom shall be 
 receivable in evidence to show what is the appropriate rate of United 
 Kingdom tax in any particular case. 
 
 (3) For the purposes of this section the expression '"' rate of tax " 
 T\-hen applied to tax paid or jjayable under this Ordinance means the rate 
 determined by dividing the amount of the tax paid or payable for the 
 year (before the deduction of the relief granted under this section) by the 
 amount of the income in resj^ect of which the tax paid or payable under 
 this Ordinance has been charged for that year except that where the income 
 which is the subject of a claim to relief under this section is computed by 
 reference to the provisions of section twenty-seven of this Ordinance on 
 an amount other than the ascertained amount of the actual profits, the 
 rate of tax shall be determined by the Commissioner. 
 
 47. — (1) If any person resident in the Colony who has paid, by deduc- 
 tion or otherwise, or is liable to pay, tax under this Ordinance for any year 
 of assessment on any part of bis income, proves to the satisfaction of the 
 Commissioner that he has paid, by deduction or otherwise, or is liable to 
 pay, Empire income tax for that year in respect of the same part of his 
 income, he shall be entitled to relief from tax in the Colony paid or payable 
 by him on that part of his income at a rate thereon to be determined as 
 follows : — ■ 
 
 (a) if the Empire rate of tax does not exceed one-half of the rate of 
 tax appropriate to his case under this Ordinance in the Colony 
 the rate at which relief is to be given shall be the Empire rate 
 of tax ; 
 (6) in any other case the rate at which relief is to be given shall be 
 half the rate of tax appropriate to his case under this Ordi- 
 nance. 
 
 (2) If any person not resident in the Colony who has paid, by deduc- 
 tion or otherwise, or is liable to pay, tax under this Ordinance for any year 
 of assessment on any part of his income proves to the satisfaction of the 
 Commissioner that he has 2>aid, by deduction or otherwise, or is liable to pay 
 Empire income tax for that year of assessment in respect of the same 
 part of his income, he shall be entitled to relief from tax paid or payable 
 by him under this Ordinance on that jjart of his income at a rate thereon 
 to be determined as follows : — 
 
 (a) if the Empire rate of tax appropriate to his case does not exceed 
 
 the rate of tax approi)riate to his case under this Ordinance, 
 tlic rate at which relief is to be given shall be one-half of the 
 Empire rate of tax ; 
 
 (b) if the Empire rate of tax a])propriate to his case exceeds the rate 
 
 of tax appropriate to his case under this Ordinance, the rate 
 at which relief is to be given shall be equal to the amount 
 by which the rate of tax a])propriate to his case under this 
 Ordinance exceeds one-half of tli(^ Empire rate of tax. 
 
 (3) For the purposcH of this section, Emj)ire income tax means any 
 incomf! tax charged under any law in force in any part of His Majesty's 
 JJoriiiiiioiis or in any phict; undt-r His Majesty's Protection (other than the 
 United Kingdom or ( his (J()h)ny), provided that the legislature of that part 
 or place has provided for n^lief in respect of tax charged on income both 
 in that part or ph'iee an<l this Colony in a manner similar to that provided 
 in this ;-ject ion.
 
 33 
 
 (4) For the purposes of this section the rate of tax under tliis Ordinance 
 shall be computed in the manner provided by sub-section (3) of the last 
 preceding section of this Ordinance and the Empire rate of tax shall be 
 computed in a similar manner. 
 
 (5) Where a j)erson is for any year of assessment resident both in the 
 Colony and in a part or place in which Empire income tax is charged, he 
 shall for the purposes of this section be deemed to be resident where 
 during that year he resides for the longer period. 
 
 48. Where, under any law in force in any part of His Majesty's Official 
 Dominions or in any place under His Majesty's protection, provision is s^<^r®cy. 
 made for the allowance of relief from income tax in respect of the payment 
 of income tax in this Colony, the obligation as to secrecy imposed by 
 section four of this Ordinance shall not prevent the disclosure to the author- 
 ised officers of the Government in that part of His Majesty's Dominions 
 or in that place under His Majesty's protection of such facts as may be 
 necessary to enable the proper relief to be given in cases where relief is 
 claimed from income tax in this Colony or from income tax in that 
 part or place aforesaid. 
 
 Collection and repayment of tax. 
 
 49. — (1) The Commissioner shall from time to time forward to the Extracts 
 Collector certified extracts from the assessment lists containing the names from aiisess- 
 and addresses of the persons assessed together with the amount of tax j^^ ^^^^ \q 
 payable by each person. Collector : 
 
 (2) Collection of tax shall in cases where notice of an objection or an procedure ia 
 appeal has been given remain in abeyance until such objection or appeal is cases where 
 determined ; provided that the Collector may in any such case enforce appe^alTs '^^ 
 payment of that portion of the tax (if any) which is not in dispute. pending. 
 
 50. Tax shall be payable within thirty days after the service of a notice Time within 
 
 of assessment under section forty-three of this Ordinance. ^^^^'l •'^^■^', 
 
 ment is to be 
 
 made. 
 
 51. If any tax is not paid within the period prescribed in section fifty of Penalty for 
 this Ordinance— ' non-payment 
 
 (a) a sum equal to [5] per centum of the amount of the tax payable enforcement 
 
 shall be added thereto, and the provisions of this Ordinance of payment, 
 relating to the collection and recovery of tax shall apply to 
 the collection and recovery of such sum ; 
 
 (b) the Collector shall serve a demand note upon the person assessed, 
 
 and if payment is not made within thirty days from the date of 
 the service of such demand note, the Collector may proceed to 
 enforce payment under the law for the time being in force in the 
 Colony relating to the collection of tax or as hereafter provided. 
 
 52. Where payment of tax in whole or in part has been held over Collection of 
 pending the result of a notice of objection or of an appeal, the tax out- \^^ . "" 
 standing under the assessment as determined on such objection or appeal tio^ Qf objec- 
 as the case may be shall be payable within thirty days from the receipt tion or appeal, 
 by the person assessed of the notification of the tax payable, and if such 
 
 tax is not paid within such period the provisions of the last preceding 
 section shall apply. 
 
 53. Tax may be sued for and recovered in a Court of competent jurisdic- Suit for tax by 
 tion by the Collector in his official name with full costs of suit from the Collector, 
 person charged therewith as a debt due to the Government of the Colony 
 
 as well as by the means provided in section fifty-one of this Ordinance. 
 
 54. — (1) If it be proved to the satisfaction of the Commissioner that Repayment 
 any person for any year of assessment has paid tax, by deduction or other- °^ *^^'
 
 34 
 
 Penalties for 
 offences. 
 
 False state- 
 ments and 
 retiims. 
 
 Saving for 
 Criminal 
 Proceedings. 
 Rules. 
 
 wise, in excess of the amount with which he is properly chargeable, such 
 person shall be entitled to have the amount so paid in excess refunded. 
 Every claim for repayment under this section shall be made within two 
 years from the end of the year of assessment to which the claim relates. 
 The Commissioner shall give a certificate of the amount to be repaid and 
 upon the receipt of the certificate the Treasurer shall cause repayment to 
 be made in conformity therewith. 
 
 (2) Except as regards sums repayable on an objection or ap2)eal, no 
 repayment shall be made to any person in respect of any year of assess- 
 ment as regards which that person has failed or neglected to deliver a 
 return or has been assessed in a sum in excess of the amount contained in 
 his return, provided that he has received notice of the assessment made upon 
 him for that year : unless it is proved to the satisfaction of the Commis- 
 sioner that such failure or neglect to deliver a true and correct return did 
 not proceed from any fraud or wilful act or omission on the part of that 
 person. 
 
 General. 
 
 55. Any person guilty of an offence against this Ordinance shall be 
 liable on summary conviction before a magistrate to a fine not exceeding 
 one hundred pounds and in default of payment to imprisonment with or 
 without hard labour for any term not exceeding six months. 
 
 56. (1) Any person who, for the purpose of obtaining any deduction, 
 rebate, reduction or repayment in respect of tax for himself or for any 
 other person, or who in any return, account or particulars made or 
 furnished with reference to tax, knowingly makes any false statement or 
 false representations and 
 
 (2) Any person who aids, abets, assists, counsels, incites or induces 
 another person : — 
 
 [a) to make or deliver any false return or statement under this 
 
 Ordinance ; or 
 (6) to keep or prepare any false accounts or particulars concerning 
 any income on which tax is payable under this Ordinance ; 
 shall be liable on summary conviction before a magistrate to a fine not 
 exceeding one hundred pounds or to imprisonment with or without hard 
 labour for a term not exceeding six months. 
 
 57. The provisions of this Ordinance shall not affect any criminal pro- 
 ceedings under any other Ordinance or Law. 
 
 58.^ — (1) The Governor in Council may from time to time make rules 
 generally for carrying out the ])rovisions of this Ordinance and may, in 
 particular, Ijy those rules provide : — 
 
 (r/) for tlie form of returns, claims, statements and notices under this 
 
 Ordinance ; 
 (h) for the deduction and ])ayni('nt of tax at the source in respect of 
 (miojuments and pensions payable out of ilic revenue of the 
 Colony ; 
 (c) any such matters as iire authorised by tliis Ordinance to be 
 prescribed. 
 (2) All rulr.s purport ing to lir niiidr in |iu)siiiinc(< of this section shall 
 be jHiMi.slicd in tlic; (Jazctlti- and .shall comi^ into o|icration on such imblica- 
 tioii or at hucIi other time as may he named in such rules. 
 
 (.'J) If any person fails lo comply with or contravenes the provisions of 
 any rule niad<- under this Ordinance he shall be guilty of an offence against 
 this Ordinance. 
 
 (1) All rules made under this Ordinance shall be judi(;ially noticed.
 
 35 
 
 H 
 
 fe Q 
 O 
 
 o a 
 
 t— ( 
 
 
 Q 
 
 H 
 
 t^ 
 
 f^ ^ 
 
 W 
 
 -M o 
 
 PL, 
 
 ^ro 
 
 p^ 
 
 ^^ 
 
 <!l 
 
 ^ 1 
 
 
 H H 
 
 
 W O 
 
 
 H H 
 
 
 !^^^ 
 
 
 o p 
 
 
 o ;z; 
 
 
 ^ <i 
 
 O O 
 
 <5 
 
 ao 
 ID 
 
 iJ 
 fj 
 
 O 
 H 
 
 o 
 
 H 
 <i 
 
 & 
 O 
 
 l-J 
 t> 
 w 
 
 EH 
 
 o <^ o 
 o '^ o 
 
 Ci « oj 
 
 +J r^ 4J 
 
 O C: ^ 
 O 
 
 .-J 
 
 
 Oi en 
 c3 C3 
 
 a ti -^ o 
 
 CO OJ 
 
 
 •4^ 
 
 >i o 
 
 '^ o 
 
 cs o o .2 
 "3 "5 '^-^ o 
 
 '^ O CO 
 
 
 £00 
 cc 1—1 
 
 ■^ ,_i CO .S 
 o 
 
 CC ^ S-* 03 
 
 ■« .2 
 
 g3 1:3 
 
 bi3 
 
 03 
 
 03 
 
 r-, ^ 
 
 ^ O 
 
 o -^ r^ 
 
 
 
 '0 
 
 <-ri 
 
 '^ 
 
 
 
 
 
 
 
 
 
 
 ^ t-t 
 
 f-i 
 
 
 
 
 
 
 
 06 
 
 
 
 Is 
 
 
 
 
 =+< 
 
 0^ 
 10" 
 
 
 
 
 
 
 
 
 
 
 
 
 
 CD 2 
 
 M-H 
 
 
 
 
 
 
 
 
 oj 
 
 ^2 
 
 
 
 
 
 
 
 
 
 31 
 
 s s 
 
 
 
 
 
 
 
 
 t- 
 
 fl 
 
 o3 cri 
 
 ^ 
 
 1 
 
 
 
 
 
 03 
 
 ^ 
 
 
 
 
 (M" 
 
 
 *> Sh 
 
 M 
 
 
 
 
 
 
 
 
 ri X 
 
 --i CB 
 
 
 
 
 
 
 5 
 
 o3 7-1 
 
 '^S 
 
 
 
 
 
 
 
 =j~i =^_i 
 
 
 
 
 
 
 
 (— • 
 
 -ra 
 
 
 
 
 
 
 CO 
 
 c3 
 
 J 
 ' 
 
 i II 
 ^ ^^ 
 
 ^ a 
 
 c3 +-< 
 
 '0 
 
 go 
 
 c3 
 
 2+1 
 
 ' 
 
 
 
 
 
 
 , 
 
 -IJ 
 
 
 
 
 
 
 1 
 
 ^ M 
 
 '^'^.^ • 
 
 
 
 
 
 
 <^ 
 
 Opr^ 
 
 0^ 2 S 
 
 
 
 
 
 
 
 c3 
 
 "3 "* 
 
 =+J 
 
 1 
 
 
 
 
 lO- 
 
 
 
 
 1^ t 
 3 M 
 
 
 1 
 
 
 cq 
 
 
 X 
 
 rt e3 
 
 
 
 
 
 
 o3 
 
 c3 
 
 2 »3 M-H 
 
 
 
 
 
 
 H 
 
 
 
 
 
 
 
 
 
 
 
 ^ 'f 
 
 -1-3 
 
 
 
 
 
 
 r^ 
 
 ^ M 
 
 bt)'^ to 
 
 
 
 
 
 
 
 
 •^ 
 
 ^ SC-'H 
 
 
 
 
 
 
 
 
 g 
 
 03 _Q 
 >^C0 
 
 deducti 
 loss broi 
 forward 
 
 «+J 
 
 r^ 
 
 
 
 
 
 
 '^ 
 
 
 
 1^ 
 
 
 0^0^ 
 
 
 "^ 
 
 
 
 
 
 lO ^-^ 
 
 
 
 
 s-s 
 
 
 
 
 
 
 H 
 
 ^ 
 
 
 
 
 
 
 4^ 
 
 
 
 
 
 
 
 
 S 
 
 c/3 
 
 m" ^ 
 
 jj 
 
 
 
 
 
 r— 1 (M 
 
 
 H 
 
 o3 
 
 
 CO 
 
 
 CO CO 
 
 CO 
 
 M 
 
 
 
 
 
 
 
 Oi C5 
 
 
 
 >^ 
 
 
 1 — 1 
 
 
 I— i I— 1 
 
 
 to 
 
 1—1 • •— ' 
 
 
 
 
 
 
 
 <: 
 
 S'o 
 
 
 
 
 
 
 
 ^-H 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1—4 
 
 
 C^ CO 
 
 
 ;h 
 
 
 
 CO 
 
 
 CO CO 
 
 CM 
 
 cS 
 
 CO <V 
 
 
 
 05 
 
 
 en 03 
 
 
 
 
 ?2 S 
 
 
 
 1-H 
 
 
 r— 1 ! — 1 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ,_, 
 
 
 
 
 
 
 -tJ 
 
 
 CO 
 
 
 
 
 
 
 C 
 
 
 C5 
 
 
 
 
 
 
 • rH 
 
 
 1— ( 
 
 
 
 
 
 
 ,5 
 
 
 
 
 
 
 
 
 ax) 
 
 
 +i 
 
 
 
 
 
 
 ^ 
 
 
 
 6 
 
 
 
 
 
 
 
 
 o3 
 
 '^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 .2 
 
 
 
 
 
 
 
 
 02 
 
 
 00 
 
 
 r-I 
 
 
 
 
 CO 
 
 
 
 -p 
 
 OQ 
 
 00 
 c3 
 
 -0 
 
 
 
 
 
 
 CJ 
 
 C4_j 
 
 fl 
 
 
 
 
 
 s 
 
 tc 
 oa 
 
 
 
 o3 
 
 S d 
 
 CO 
 00 
 
 
 
 
 
 
 « 
 
 0) 
 
 <v 
 
 
 
 
 
 
 05 
 
 CO 
 c3 
 
 1 — 1 
 
 CO , 
 
 o
 
 36 
 
 'e 
 
 XI 
 
 ^ 
 
 W 
 
 Pk 
 Pu 
 
 •V 
 
 (11 
 
 lO 
 
 ,a 
 
 "X 
 
 +3 
 
 II 
 
 
 ri 
 
 
 o 
 
 ca 
 
 
 
 Cl 
 
 £1 
 
 o 
 
 ctf
 
 37 
 
 
 
 
 o o 
 
 
 o o 
 
 
 ^°^^ 
 
 o 
 
 O O 
 
 o o 
 (m"(m" 
 
 o o 
 
 ice 
 
 anni 
 
 ried 
 
 o 2 O ^ 
 
 ^ .a^ 
 
 o 
 
 o o 
 
 «+J <lfi 
 
 o o 
 
 '—' w ;j 
 
 .• O Q O o 
 
 ■ 8. 
 alance 
 SS still 
 e carr 
 forwar 
 
 
 
 to •• 
 
 o 
 
 
 1) Balj 
 £500 
 be ca 
 
 further 
 2) 2,0 
 2) 1,0 
 2) 2 
 200 all. 
 
 W^-^ 
 
 
 
 CO n 
 
 ^ Jq" 
 
 
 
 1—1 CM 
 
 ^_- ' — ' 
 
 
 ^-'^^-— 4(^ 
 
 
 
 
 
 
 
 'o i^ 
 
 'o^^ i'o 3 
 
 
 O ' — > 
 
 
 0-73 
 
 o 
 
 O 
 
 r:1 O O o 
 
 
 c^ 1 
 
 o o 
 
 1 
 
 lO i^ 
 
 o 
 
 b?' O O C3 
 
 t- C^ ^ <D rS C^ 
 
 ' 
 
 cm" 
 
 
 
 ^H 
 
 --h" "^ 
 
 Allow 
 tax ir 
 repres 
 allowi 
 loss e 
 
 
 
 
 
 
 pq 
 
 
 
 
 I— 1 (M 
 
 \ — 1 
 
 <M C^C^C^ 
 
 
 
 
 s_- ' 
 
 " — ' 
 
 
 ■4-1 ., . 
 
 
 
 
 
 
 
 ^ o iy s 
 
 
 
 
 
 
 
 2 o ?3-^ 
 
 
 
 
 
 
 
 . 5 g ll ^ '-^ 
 
 
 LO ICD 
 
 
 lO 
 
 
 O O O lO 
 
 1+i 1 
 
 CM G^l 
 
 1 
 
 CM 
 
 
 O lO ^ (M 
 
 Max 
 
 allow 
 tax 
 anio 
 Co 
 
 
 
 
 
 
 
 
 
 
 
 
 
 O 1 -^ 
 
 
 
 
 
 
 
 1^ ^ ^. %^ T'^ . 
 
 
 
 
 
 
 
 payal 
 alio 
 ce wa 
 ade fo 
 
 brouo 
 rward 
 
 
 o o 
 
 
 O 
 
 
 o o o o 
 
 =+J 1 
 
 )0 lO 
 
 1 
 
 lO 
 
 
 O O CO Id 
 
 
 CM 
 
 ' 
 
 
 
 1 — 1 : — 1 
 
 S ^ § S §^ 
 
 
 
 
 
 
 
 H ^a ,B 
 
 
 
 
 
 
 
 % ^ <^ ^ 
 
 G " b bD-!^ 03 
 
 
 
 
 
 
 
 4. 
 ,al inco 
 r year i 
 I. 3 befc 
 eductin 
 s broug 
 irward i 
 
 
 o o 
 
 
 o 
 
 
 o o o o 
 
 «+i ^ 
 
 o o 
 
 r^ 
 
 o 
 
 
 o o o o 
 
 ^ 
 
 o^o_ 
 
 ^ 
 
 o^ 
 
 
 O^ O^ <:0^ O^ 
 
 
 lO -"h" 
 
 
 r— r 
 
 
 (m" (m" .-h ^ 
 
 
 
 
 
 
 
 
 1^ a o 
 
 
 
 
 
 
 
 ■"* G^ d 
 
 
 
 
 
 
 
 '^ O Sh ^ 
 
 o 
 
 .—1 (^ 
 
 CO 
 
 -* 
 
 
 lO fO tr~ re 
 
 CO JS 5 O « 
 M f-l rt f=^ 
 
 CO 
 
 CO CO 
 
 CO 
 
 oo 
 
 
 CO CO CO CO 
 
 C:> 
 
 Oi <Zi 
 
 o 
 
 CJi 
 
 
 Ci as oi CTi 
 
 1> _ -^ 
 
 1 — 1 
 
 1 — 1 1—1 
 
 1 — 1 
 
 1 — 1 
 
 
 1 — \ 1 — ^ 1 — ^ 1 — 1 
 
 tc S ■■*-* 
 
 
 
 
 
 
 
 03 •-- M-i O 
 
 
 
 
 
 
 
 <! M o 
 
 
 
 
 
 
 
 ■'"' 
 
 
 
 
 
 
 
 . !-, M p- 
 
 '^ ^ ^ I 
 
 \ — 1 
 
 (M CO 
 
 -rH 
 
 lO 
 
 
 to t~ CO Oi 
 
 CO 
 
 CO CO 
 
 CO 
 
 CO 
 
 
 CO CO CO CO 
 
 en 
 
 C5 C5 
 
 Oi 
 
 C5 
 
 
 Ci cJS OS Ci 
 
 1) t/i p; 
 
 \ — 1 
 
 1 — 1 1 — 1 
 
 1-H 
 
 1— 1 
 
 
 r-H 1— 1 1 — 1 1 — 1 
 
 >H c« -^ 
 
 
 
 
 
 
 
 
 "^ • 
 
 
 -S : 
 
 T-^ ^ 
 
 , 1 
 
 -H ^ '^ -tH 
 
 
 '-^ 
 
 1 — 1 
 
 To 
 
 CO CO 
 
 CO 
 
 CO CO CO CO 
 
 
 bC 
 
 CO 
 
 C71 cji 
 
 Ci 
 
 OS OS Cjj CJi 
 
 
 o 
 
 en 
 
 o 
 
 I— 1 1—1 
 
 I— I 
 
 1 — ^ r— ( 1 1 , 1 
 
 
 !-l 
 
 
 f-i 
 
 H 
 
 
 
 
 ■^ : 
 
 ^-^ 
 
 -^ : 
 
 aj 
 
 
 
 
 JXi 
 
 ^66 
 
 .2 
 
 
 6 
 
 6 6 6 6 
 
 
 
 ti 'TJ tJ 
 
 
 CS r^ 
 
 '^ 
 
 '^'Ti'-a "Ti 
 
 
 m 
 
 c3 
 
 M 
 
 M 
 
 -1^ 
 
 
 
 
 
 -t^ 
 
 ^ : 
 
 
 
 
 
 .^ 
 
 
 nS 
 
 a 
 
 
 
 — 1 
 
 "15 
 
 M 
 
 
 02 
 03 
 
 q; 
 
 03 
 
 ' 
 
 
 
 ^ P! 
 
 
 CO 
 
 o3 
 
 
 
 
 ■^ to 
 fe CO 
 
 ^^^' 
 
 =3 s 
 
 'o 6 
 
 d 
 
 6 6 6 6 
 
 
 2 i» 
 
 ;h ^ 
 
 T3 
 
 r^ r^ --C n3 
 
 
 -3 '^ 
 
 4) 
 
 M '^ 
 
 ca 
 
 
 
 
 ■-' O 
 
 & o 
 
 
 
 
 
 '-I ii 
 
 t^ 
 
 
 
 
 
 
 -t^ '^ "CJ 
 
 r^a ^ 
 
 -d 
 
 'T^^ M M 
 
 
 >^ 
 
 CO C M 
 
 
 -U 03 
 
 -1-2 
 
 C t-i -t-j 4J 
 
 
 --H 'M CO 
 
 
 ■^ -—1 
 
 irr 
 
 CO so '^ lO 
 
 y=l 
 
 y:3 
 
 -a 
 H 
 
 28o29 i.
 
 38 
 
 'Ig -TS -TS -^S 
 
 CO CO Oi O '^ 
 
 t-H ^ r-H <M <^ 
 
 o 
 : : : : o 
 
 ■ ■ ■ ■ '^^ 
 
 O O O O '^'l" 
 
 0000=+! 
 
 C<l C<1 lO O t_, 
 
 fl . . ^ CI 
 
 o 
 o 
 
 2+^ 
 
 tJ o 
 .2 § 
 
 I— ( 
 
 Q 
 
 o 
 
 
 o 
 
 <^ 
 
 
 '0 
 
 eg 
 
 eg 
 
 <u „ „ 
 
 
 ^ 
 
 
 ,a " - 
 
 ^ 
 
 <:« 
 
 rH 
 
 -ti 
 
 
 C^ 
 
 •2 
 
 
 
 
 'IS -^ '^ 
 
 CO 
 
 
 
 
 _: CO >» 05 
 
 1—1 
 
 -jo 
 
 to 
 
 
 
 
 
 i=3 : : : 
 
 
 OJ 
 
 
 
 
 
 =3 
 
 ^' 
 
 
 
 CT* 
 
 ri 
 
 '"j '*?> <!**1 (**? 
 
 
 
 
 
 10 
 
 10 
 
 a 
 
 
 ^H ^H ^H ^— H 
 
 r— 1 
 
 ' '~* 
 
 
 <m 
 
 
 eg 
 
 cu 
 
 ■*i -^ 
 
 
 '^ 
 
 Oj 
 
 
 
 n-. 
 
 ^^ 
 
 
 
 ^ 
 
 « s 
 
 s a 
 
 
 'S-2'^ 
 
 
 
 
 
 
 
 
 5^ Ti 
 
 
 
 ^ 
 
 
 10 
 
 
 « ^73 S-. eg 
 
 
 <iri 
 
 (^ 
 
 
 cc 
 
 OS 
 
 Balau 
 
 loss si 
 
 be ca 
 
 forw 
 
 
 
 
 
 
 cq_ 
 
 
 M ^ ^ —- 
 
 
 
 
 
 
 
 « t^ 
 
 
 
 
 
 
 CO 
 
 ^ S 
 Ssti sg 
 
 
 <lr) 
 
 1 
 
 
 
 
 CO 
 
 
 
 
 
 
 
 
 ^-5 <^ ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 . M rH <+H 
 
 
 
 
 
 
 
 ■0^ ^ ° 
 
 
 
 
 
 
 
 ^ g g § 
 rj C C 
 
 
 
 
 
 
 
 t-^ 
 
 
 I+i 
 
 1 
 
 
 CD 
 
 
 .S Sh .. 
 
 
 
 
 
 
 
 l^ <D eg f^ 
 
 
 
 
 
 
 
 1^ £i ■+-> .;=; 
 
 
 
 
 
 
 
 H 
 
 
 
 
 
 
 
 g^^.S 
 
 
 'TS 
 
 
 
 OS 
 
 
 r= a^' _d ^ 
 
 
 
 
 
 
 
 Maxim 
 llowanc 
 ax (= ' 
 amount 
 Col. 5 
 
 
 CO 
 
 1 
 
 
 CO 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 =+J 
 
 
 
 
 
 (S -^^ 
 
 
 
 
 
 
 
 <V , A^ 
 
 
 
 
 
 
 
 ax payabl 
 no allow 
 ance M^as 
 made for 
 ss brough 
 
 =35 
 
 CO* 
 
 
 
 CD 
 
 id 
 
 
 i:-J 
 
 
 
 ^+1 
 
 
 H^ rS 
 
 
 
 
 
 
 
 fi ^ bC^, 
 
 m 
 
 
 
 
 
 
 c* •'-' =*-< f-i b£ 
 
 . .— » 
 
 
 
 
 
 ^ 
 
 al inco 
 r year 
 1. 3 be 
 eductii 
 IS brou 
 
 
 1^+^ 
 
 g 
 
 
 
 
 
 ;-i 
 
 
 
 
 ^"^ 
 
 
 ^^a^o 
 
 
 
 
 
 
 
 
 isg 
 
 
 
 
 
 
 
 2 &H f^ tJ 
 
 
 
 
 
 
 1 — 1 
 
 
 m Oi CJ 
 
 
 
 CO 
 
 
 CO 
 
 CO 
 
 M M u 
 
 ^ .2 
 
 
 
 as 
 
 
 
 
 
 
 
 r-H 
 
 
 I-H 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 t^ 1 
 
 
 
 
 
 
 
 i • 
 
 »H Q_J S-. 
 
 
 
 1 1 
 
 
 CO 
 
 '^i 
 
 C3 c/j Oj 
 O' M P 
 
 
 
 Oi 
 
 
 1 — 1 
 
 
 
 
 _M 
 
 
 5+-I 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 eg 
 
 
 
 
 
 
 
 
 <u 
 
 
 
 
 
 
 
 >■ 
 
 
 
 
 
 r£l 
 
 
 M 
 
 
 
 
 
 
 _o 
 
 
 <D 
 
 
 
 
 
 
 
 
 -(J 
 
 
 ""^ 
 
 
 
 
 "^ 
 
 
 c8 
 
 
 
 
 
 
 
 
 
 <D 
 
 
 
 
 
 ^ 
 
 ^ 
 
 
 
 
 
 .s 
 
 a; 
 
 C/J 
 
 to 
 
 C/J 
 
 eg 
 
 
 
 
 
 M 
 
 tn 
 
 
 w 
 
 
 
 
 
 eg 
 
 m 
 
 eg 
 
 
 
 
 
 >H 
 
 

 
 39 
 
 I— < 
 
 CO 
 
 CO 
 
 K^ 
 
 00 
 
 CD 
 
 ^ 
 
 0) 4j 
 
 1 — 1 
 
 -rJH 
 
 r— 1 
 
 
 
 
 
 
 1 — 1 
 
 
 
 OS 
 
 
 
 
 
 ■rH 
 
 00 
 
 lO 
 
 -* 
 
 O 
 
 I— 1 
 
 ^-y 
 
 ^ 
 
 lO 
 
 t- 
 
 CO 
 
 Oi 
 
 
 
 
 
 d o 
 
 as 
 as 
 
 CO 
 00 
 
 t*^ 
 
 a 
 
 00 lO 
 
 05 
 CO 
 
 CO 
 
 
 CO 
 
 
 o 
 
 no 
 
 O 
 
 ■7:3 
 
 o 
 
 n3 
 
 o 
 
 'TIS 
 
 O 
 
 o 
 
 42 ® 
 O O 
 
 CO 
 
 
 6 
 
 
 ■*^ > 
 as ci3 
 
 rdrd 
 
 « 
 
 o ^ ^ 
 
 '^ -^^ 5r! 
 o t— 1 1^ 
 
 a 2 " 
 * o "^ 
 
 O) 
 
 .3 o 
 
 CO o 
 
 03 
 
 o 
 o 
 
 1— r 
 
 o 
 o 
 o 
 
 o 
 o 
 
 I— r 
 
 00 
 
 CO 
 
 OS 
 
 I— 1 
 
 CO 
 
 CO 
 
 05 
 l-H 
 
 CO 
 
 OS 
 
 I— ( 
 
 lO 
 CO 
 
 05 
 
 I— i 
 
 CO 
 CO 
 OS 
 
 1—1 
 
 CO 
 OS 
 
 I— < 
 
 to 
 
 CO 
 OS 
 r— 1 
 
 CO 
 
 CO 
 OS 
 I— I 
 
 d 02 
 
 bC 
 
 d 
 
 d 
 
 c3 
 
 ■S £-« 
 
 •--I "-I o 
 
 S ■+^ d 
 
 ■fH TJ ^ 
 
 t* d cs 
 a roo 
 
 d --* i+i 
 
 '!^ <^ *> 
 2 ifi ^ 
 
 1 
 
 >-. 
 
 > .2 ■— ' 
 
 K^ <4-l 
 
 O) hrl 
 CO HH 
 
 o . 
 d o 
 
 -4^ 
 W 
 
 > 
 
 O
 
 40 
 
 APPENDIX III. 
 
 The following example is intended to explain the ])roviso to sub- 
 section (1) of Section 23 of the Model Ordinance relating to the deduction of 
 tax from the dividends of companies. ( Vide also para. 29 of the Report.) 
 
 A company is resident in the Colony, where its chargeable income for 
 a year of assessment amounts to £6,000, made up as follows : — 
 
 £ 
 
 Profits of the year preceding the year of assess- 
 ment arising in the Colony ... ... ... 5,000 
 
 Profits received in the Colony during the year 
 preceding the year of assessment and derived 
 from business operations carried on by the 
 Company oiitside the Colony... ... ... 1,000 
 
 £6,000 
 
 The Company pays tax in the Colony on this amount at the flat rate 
 of Xs. in the £. 
 
 The Company's profits outside the Colony during the year preceding 
 the year of assessment amounted to £5,000 and out of the total profits of 
 £10,000 for that year (£5,000 inside the Colony plus £5,000 outside the 
 Colony), the Company paid dividends amounting to £9,000. 
 
 Section 23 ot the Ordinance provides that in a case of this nature 
 the Company's right of deduction shall be restricted to that "portion 
 of the dividends which is paid out of income on which tax is paid or pay- 
 able by the Company." In the case taken, the Company would, under 
 Section 23, be entitled to deduct tax from six-tenths of the total dividend 
 of £9,000, that is, from £5,400 of the dividend. 
 
 (»3/845)Q Wt 18317 068 'JOOO rj'lii II <« S, IM- "-3 
 
 tonmsJlSlTT of UALIFOltm^
 
 Gt . _Brit._ 
 
 JEB'er-depart- 
 
 tee on income 
 
 tax^in the~coToHes 
 no-fc^ossefBTng^ respond 
 sible gov^rnment#_«- 
 Reportr 
 
 HJ 
 4707 
 
 A2 
 1922 
 
 UNIVERSITY OF CALIFORNIA AT LOS ANGELES 
 
 THE UNIVERSITY LIBRARY 
 This book is DUE on the last date stamped below 
 
 iiFa 
 
 FEB 
 
 7 REC'D 
 
 DUE 2 WKS FRC 
 
 ^Al:' i 
 
 iVi HATE RECEIVED 
 
 ary Loan 
 I ( 530 University Research 
 
 8.0x951575 
 
 Los Anqeies,CA 90095-1575 
 
 Lbrary 
 
 ^^=«SE™ 
 
 UC SOUTHERN REGIONAL LIBRARY FACILITY 
 
 ) 
 
 AA 000 851 637 9
 
 Universit 
 
 Southe 
 
 Libra