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16 June, 1911.] Double Income Tax. Day. Mr. HARCOURT: I think we might take the two together. General BOTHA : Then we mix the two vp —the death duties with the income tax. Mr. LLOYD GEORGE : I think there is something different in both these points, and perhaps we had better dispose of the matter of income tax first. It is better that they should be dealt with separately. They are two totally different points. Mr. HARCOURT : Then we will discuss the question of income tax first and then go to death duties. General BOTHA : Of course in South Africa there is a very strong feeling in regard to income tax, and I have prepared a short memorandum of the grounds upon which I wish to state our case. Taking first the question of double income tax, I should like to preface my remarks by stating that it is with considerable diffidence that I venture to raise a subject which was so fully investigated at the last Conference, when the then Chancellor of the Exchequer made perfectly clear the considerations which rendered it impossible for His Majesty's Government to grant the desired relief. Looked at from the standpoint of the Imperial Government, I am bound to admit that the reasons adduced by them in 1907 against the granting of our request were possessed of great force. In putting forward the present Resolution, however, my Government are actuated by the hope that, during the four years that have elapsed since the subject was last discussed, the Treasury authorities may have become impressed with the force of the arguments submitted by the Dominions, and that in consequence they may now be willing to make some concessions to the Dominions, even if they are still unable to grant the full measure of our request. Before proceeding further, I should like to explain that, at the present time, if we exclude the profits tax upon mining enterprises, South Africa is without a general income tax. It may be asked, therefore, why I bring forward such a Resolution, and I would anticipate that question by stating that the profits tax on mining enterprises is essentially an income tax, and would necessarily fall within the scope of any reciprocal arrangement which may be come to as a result of these representations. Moreover, the Union Government may consider it desirable, at some future date, to introduce proposals for a general income tax, and in view of that contingency, it is important that the South African representatives should have an authoritative indication of any concessions that His Majesty's Government may feel disposed to make as a result of their further deliberations on the subject. The points at issue as regards double income tax are so well known that I need do no more than sketch the broad position. The fundamental principles of the Imperial income tax are : First, that the tax should be levied on the source out of which the income arises and not directly upon the ■ individual receiving the income. Secondly, that the tax shall be levied upon income or profits received or made in the United Kingdom without regard to the locality of the property out of which the income arises or to any taxation to which it may there be subject. In the result, residents in the United Kingdom are taxed by the Imperial Treasury in respect of profits derived from the oversea Dominions, and they have also to pay income tax on the same profits in such portions of the. Dominions as taxation of this nature may be in force. While no question arises as to the right of the Imperial authorities to levy income tax upon the profits received by persons in the United Kingdom from Colonial sources, notwithstanding that the same profits may have been subjected to similar taxation in the Dominion wherefrom they are derived, I venture to submit that there is a good deal to be said, from the point of view of broad Imperial policy, in favour of some relaxation of this double taxation. If the system of double taxation continues it is calculated to deter residents in the United Kingdom from purchasing colonial investments and to turn their attention to the securities of foreign countries where they are not subject to similar exactions. This danger would be avoided if some reciprocal arrangement could be come to between the Mother Country and her

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