§ 7. Mr. Parker
asked the Under-Secretary of State for the Colonies what is the highest rate of Income Tax in Malaya and 1519 on what incomes it is paid; what is the highest income exempt from such taxation; and why a larger sum is not contributed from Income Tax in this prosperous Colony towards the Imperial war effort?
§ Mr. George Hall
The Special War Tax recently adopted in the Straits Settlements and Federated Malay States is charged on incomes of not less than £560 a year, and the rate of tax varies from 2 per cent. on small incomes to 8 per cent. on incomes of £2,330 and above. Income Tax is not a normal form of taxation in Malaya, and the debates in the local Legislatures disclosed many doubts as to its suitability in local conditions. My hon. Friend will no doubt appreciate the very substantial payments which have been contributed both by the Colony and the Malay States to His Majesty's Government for war purposes as well as their greatly increased provision for local defence expenditure.
§ Mr. Parker
Is there any reason why Income Tax in Malaya should not be raised to the same rate as in this country?
§ Mr. Hall
My hon. Friend will realise" that in one of the territories no Income Tax has ever been charged before, and that in the other, from 1921 until the present time, no form of Income Tax has been charged. There is a good deal of controversy concerning this matter, and I think that this is a very plucky effort on the part of the Governor to introduce it now.