SPLIT OF PAN-MALAYAN DEPARTMENTS (Government Policy)

Mr John Ede asked the Financial Secretary whether in view of the indication given by the Chief Minister, Federation of Malaya, that pan-Malayan departments such as income tax would be split when the Federation attains independence, and the statement made by the Chief Minister, Federation of Malaya, that a sub-committee is drafting a separate income tax law for the Federation, he will state the policy of the Government in this matter.

Mr Oon Khye Kiang: Mr Speaker, Sir, the Government's policy on the administration of income tax is still as stated by my predecessor in his Budget speech on the 7th of November, 1956, and reported in column 607 of the Official Report.

The Federation Government has made known to this Government her intention of dissolving the present pan-Malayan administration of income tax. This Government has asked her for a discussion so that the various aspects of this matter will be fully considered before a final decision is taken. It is the intention of this Government to bring to her attention the manifold advantages and benefits to the two territories of the present system and the immense unfortunate consequences that would follow a dissolution. It is hoped thereby to persuade her to continue with the present practice.