CUSTOMS (DUTIES) (NO. 2) ORDER, 1956

3.31 p.m.

The Financial Secretary (Mr T. M. Hart): Mr Speaker, Sir, I have His Excellency the Governor's authority to move,

That this Assembly, pursuant to subsection (2) of section 11 of the Custom Ordinance (Cap. 160), resolves that the Customs (Duties) (No. 2) Order, 1956, published as Notification No. S 307 in the Gazette Supplement No. 80 of 7th November, 1956, as contained in Sessional Paper No. S.L. 33 of 1956, and the Customs (Duties) (No. 2) (Amendment) Order, 1956, published as Notification No. S 321 in the Gazette Supplement No. 84 of 15th November, 1956, as contained in Sessional Paper No. S.L. 36 of 1956, be confirmed.

Sir, the original Gazette Notification S 307 had as its object considerable modifications to the tobacco tariff and amendments to the liquor tariff in so far as it refers to gin, rum and rectified spirit, and to the duty on petroleum. The main change in the tobacco tariff is, of course, in respect of cigarettes, from which 97 per cent of the tobacco tariff is derived. The duty on cigarettes has been raised half way to Federation levels and has resulted in the price of cigarettes being increased by five cents per packet of ten with corresponding increases in the price of larger packets. It was also intended to raise the duty on what is called Rhodesian-type tobacco which is used for the manufacture of the better quality of machine made local cigarettes from $2.50 a lb, to $4.50 a lb. It was considered desirable in the interest of the important tobacco revenue that there should not be too great a differential between the duty on this type of tobacco and the duty on imported cigarettes. In fixing the new rate of duty, the previous tax differential was maintained. It was thought that the fact that the duties on cigarettes generally had been raised would probably lead to a greater demand for the better type of locally manufactured cigarettes. The industry employs 52 persons. However, representations were made to the Government that the increase in price of these locally manufactured cigarettes would cause hardship to the labouring classes who are the main consumers of this type of cigarette. After consideration of these representations, it was decided to restore the duty to its previous level at $2.50 a lb. This action was taken on the understanding, however, that the manufacturers of the local cigarettes would maintain the price of the product at pre-Budget levels and that any increase in price would immediately result in an increase in duty. This restoration of duty was affected by Gazette Notification No. S 321 of which mention is made in the motion.

Subsequently, representations were made by the local manufacturers of cigars to the effect that the increase in duty on imported leaf tobacco would necessitate an increase in price which would injuriously affect their sales and, consequently, a local industry. As a result of these representations, the Government has decided to restore the duty on imported leaf tobacco to pre-Budget levels and a Gazette Notification to this effect will shortly be published.

The increase in duty on imported cigarettes has resulted in a slight increase in price. I do not think, however, that this increase will cause hardship. If it does in any particular case, the remedy lies in the hands of the consumer. He can reduce his consumption or switch to cheaper brands or he can give up smoking altogether which will probably be to his benefit, if not to that of the revenue.

The increase in the rate of tax on liquor calls for no comment.

As regards petrol, the taxpayer can perhaps regard himself as fortunate in so far as he lives in Singapore and not in the Federation.

I have been asked to draw attention to a printing error which appeared in Sessional Paper No. S.L. 33 of 1956. "Northern Island" is quoted in the Paper instead of "Northern Ireland". That has been corrected in the Gazette.

Sir, I beg to move.

Mr Chew Swee Kee: I second the motion.

Question put, and agreed to.

Resolved,

That this Assembly, pursuant to subsection (2) of section 11 of the Customs Ordinance (Cap. 160), resolves that the Customs (Duties) (No. 2) Order, 1956, published as Notification No. S 307 in the Gazette Supplement No. 80 of 7th November, 1956, as contained in Sessional Paper No. S.L. 33 of 1956, and the Customs (Duties) (No. 2) (Amendment) Order, 1956, published as Notification No. S 321 in the Gazette Supplement No. 84 of 15th November, 1956, as contained in Sessional Paper No. S.L. 36 of 1956, be confirmed.