§ Sir J. Mellor
asked the Secretary of State for the Colonies the considerations upon which he has approved the imposition by the Government of Nigeria of an Income Tax upon the pensions of retired officials of the Dependency resident in the United Kingdom; whether such a tax is 347W in accordance with the conditions of service notified on their appointment; whether he is aware that, notwithstanding Dominion Income Tax relief, severe hardship results from the double taxation of these pensions; and whether, having regard to the practical impossibility, for reasons of health, of Europeans remaining in Nigeria after the expiration of a normal period of service, and to the fact that pensioners of the Nigerian Government resident outside Nigeria are without representation in the Nigerian Legislative Council, he will invite the Nigerian Government to review the position?
Mr. M. MacDonald
In 1939 the financial circumstances of Nigeria were unfortunately such as to make it necessary to bring within the scope of Nigerian Income Tax the incomes of individuals residing outside Nigeria in respect of that portion of their incomes derived from the Colony, including pensions. I have been unable to accept the view that pensioners should be exempt from Colonial Income Tax inrespect of such income derived from a Colony where Income Tax is in operation. This arrangement is in accordance with generally accepted principles, and there is nothing in it which is inconsistent with the conditions of service notified to officers on their appointment to Government service, and similar legislation exists in Northern Rhodesia, Ceylon, Nyasaland and Kenya. The administration of a tax on incomes in such a territory348W presents considerable difficulty. In order to simplify it in Nigeria it was decided to keep the rates of tax very low and to provide no allowances in respect of earned income or dependants. This arrangement has given rise to certain anomalies; but every case of alleged hardship has been referred to the Governor for consideration. I am glad to be able to inform my hon. Friend that fresh legislation has already been introduced in the Nigerian Legislature which it is hoped will to some extent safeguard the position of pensioners.