893.512/931
The Minister in China (MacMurray) to the Secretary of State
[Received March 18.]
Sir: I have the honor to inform the Department that, on January 10th, I was informed by the British Legation that word had been received from the British Consul General in Canton to the effect that the Kwangtung Government intended to put into effect the following system of consumption taxes in the Canton area:
Existing Surtax Department will be called Consumption Tax Bureau and will levy provincial taxes on all imports ranging from 2½ per cent to 17 per cent ad valorem, in addition to new national tariff collected by Customs. Provincial tariff will not be ready by February 1st, but, pending its enforcement, present surtaxes will continue, in addition to new national tariff.
Stamp taxes on import applications and customs receipts are also to be imposed.
Provincial tariff is stated to be in compensation for likin dues which it is hoped to abolish by July, but practical result is that total import duties on British goods will greatly exceed published national tariff and would seem flagrant violation of assurance given in Annex 3 of new British Treaty.29
[Page 795]The British Consul General stated that he gathered from the press that the provincial tariff described above was in accordance with a scheme authorized by the Nanking authorities and may also be applied to other provinces.
This information was repeated to the Consulate General in Canton by telegraph, with a request for information on the subject. On January 14th Mr. Jenkins informed the Legation that he believed the above report to be correct, but that he hoped to have official confirmation on the following day. On January 15th, Mr. Jenkins informed the Legation that he had been advised by the Commissioner for Foreign Affairs that the Provincial Finance Department had under consideration a scheme of taxation similar to that described by the British Consul General, but that no definite action in the matter had been taken.
A summary of this information was repeated to Mr. Perkins in Nanking, and, under date of January 19th, he informed the Legation that, in a conversation with Dr. C. T. Wang on the 17th, the latter professed entire ignorance of the proposed taxation at Canton and said that he would have to consult with the Minister of Finance in regard to the matter; and that, on the 18th, Wang informed Mr. Perkins that he had made inquiries of Soong who replied that this taxation would not go into effect and that the various surtaxes would be abolished. Wang made the reservation, however, that the Chinese Government might, as it saw fit, impose consumption taxes applying to both native and foreign goods without discrimination, and that any such measures would have to be carried out by or with the approval of the Ministry of Finance, but that he did not know of any plans at the present time for levying such taxation.
This information was repeated to the Consul General at Canton and, under date of January 25th, he informed the Legation that the Commissioner for Foreign Affairs had just advised him verbally that the local authorities had abandoned the proposed consumption tax and that likin would continue for the present, as well as the 2½ per cent surtax begun in 1926, but that the latter tax would be collected by the maritime customs authorities, presumably as a part of the new tariff. He further stated that the Commissioner for Foreign Affairs added that the so-called Inland Tax Bureau which supervised the collection of the 2½ per cent surtax, petroleum tax, and other special duties, is to be abolished, and that the Standard Oil Company and other oil companies have received official notice that the Oil Tax Bureau will be closed on January 31st, but that such companies will be expected to pay the special tax on oil imported before that date and still in storage. Mr. Jenkins stated that it was evident the local government had been forced to abandon its scheme for a provincial consumption tax as a result of vigorous pressure from Nanking, and [Page 796] that he was informed confidentially that the local Commissioner of Customs had been instructed to remit all revenues collected to Nanking.
I have [etc.]
- Treaty relating to the Chinese customs tariff, etc., signed at Nanking, December 20, 1928, with annexes, etc.; League of Nations Treaty Series, vol. xc, pp. 337, 354.↩