“From the above-mentioned considerations, the Government can hardly develop and encourage trade without the abolition of likin.  By treaty with Great Britain, America and Japan, the Government can increase the rate of Customs tariff to cover losses due to the abolition of likin.  The question under consideration is not a new one.  But the cause which has prevented the Government from reaching a prompt decision upon this question is the fear that, after the abolition of likin, the proceeds from the increased Customs tariff would not be sufficient to cover the shortage caused by the abolition of likin.

COST OF ABOLITION OF LIKIN

“But such a fear should disappear when the Authorities remember the following facts:—­

“(a) The loss as the result of the abolition of likin:  $38,900,000.

“(b) The loss as the result of the abolition of a part of duty collected by the native Customs houses:  $7,300,000.

“(c) Annual proceeds from different kinds of principal and miscellaneous taxes which shall be done away with the abolition of likin $11,800,000.

“The above figures are determined by comparing the actual amount of proceeds collected by the Government in the 3rd and 4th years of the Republic with the estimated amount in the Budget of the fifth year.  The total amount of loss caused by the abolition of likin will be $58,000,000.

INCREASE OF CUSTOMS TARIFF

“The amount of increase in the Customs tariff which the Government expects to collect is as follows:—­(a) The increase in import duties $29,000,000. (b) The increase in export duties Tls. 6,560,000.

“The above figures are determined according to the Customs returns of the 2nd, 3rd, and 4th years of the Republic.  By deducting Tls. 2,200,000 of transit duty, the net increase will be Tls. 33,600,000, which is equal to $48,500,000.  For the sake of prudence, allowance of five per cent. of the total amount is made against any incidental shortage.  The net revenue thus increased would amount to $46,100,000.  Against the loss of $58,000,000, there will be a shortage of some $11,900,000.  This, however, will not be difficult to make good by new sources of revenue as the result of a tariff revision:—­(a) Tax on goods at the time of manufacture $800,000. (b) Tax on goods at the time of sale $8,000,000. (c) Tax on cattle and slaughtering houses $2,000,000. (d) Tax on foodstuffs $4,000,000.

“Under (a) and (b) are the taxes to be collected on native made foreign imitation goods and various kinds of luxurious articles.  Under (c) and (d) are taxes which are already enforced in the provinces but which can be increased to that much by reorganizing the method of collection.  The total sum of the proceeds set forth under above items will amount to $14,800,000.  These will be quite sufficient to cover the loss caused by the abolition of likin.