§ 85. Mr. Sorensenasked the Secretary of State for the Colonies if he is aware that existing direct taxation scales in Northern Rhodesia discriminate unfairly against Africans as compared with Europeans; if he would give details of the allowances and income tax limits within which tax is paid by Africans and Europeans; and if he will ensure that Africans living in urban areas earning less than 20s. per month will be exempt from direct taxation.
§ Mr. Rees-WilliamsThere are two forms of direct taxation in Northern Rhodesia; native tax and income tax, details of which are as follows:—
Native tax: The Governor is empowered to prescribe the rate of tax payable in any particular area up to a limit of 20 shillings per annum. In practice the rates of tax vary from 6 shillings per annum in the remotest rural districts to 15 shillings per annum in the mining districts. The rate is based on the estimated average earning capacity of adult males in each area and not on an individual income basis. An African may be exempted from the payment of this tax if he is unable to find the means of payment by reason of age, disease or other physical disability, or of economic conditions
Income Tax: Africans who are liable for native tax are exempt from the payment of income tax. Income tax, therefore, is paid by Europeans only. Deductions are allowed at the rate of £250 per annum for unmarried persons; £500 per annum for married persons; £120 per annum for each child. Deductions are also allowed for other dependants and for insurance up to a maximum of £120. On the chargeable income so assessed, income tax is payable as follows:—
Unmarried persons:
On a scale which varies from 2s. in the £1 on the first £500 to 7s. 6d. for every £1 in excess of £1,750.
206WMarried persons:
On a scale which varies from 1s, in the £1 on the first £250 to 7s. 6d. for every £1 in excess of £2,500.
With regard to the first and third parts of the question, I am aware that the arrangements outlined above have been criticised on the grounds that, while Europeans in income groups below a certain level are exempt from the payment of income tax, no similar exemption from the payment of native tax is provided for in the case of Africans.
These matters were considered by the Northern Rhodesia Taxation Review Committee in 1946. In the Majority Report submitted by this Committee it was suggested that a Committee should be appointed to consider the question of automatic exemption from native tax of Africans whose incomes do not exceed a certain figure. I will ask the Governor what action has been taken on this recommendation and communicate with my hon. Friend further in due course; but I cannot accept the contention that there is unfair discrimination against Africans.