Note 751 — APPENDIXES
Reading edition
The suggested classification, if satisfactory from the speculative point of view, does, however, give rise to practical difficulties. In public financial statements it is, of course, impossible to show the actual nature of the revenue on such a basis. The only practicable course is to classify as a whole the gross revenue and the net revenue for the entire service. There is difference of opinion even as to this apparently simple problem. The common-sense solution would seem to be that recommended by Sir Edward Hamilton, viz. to reckon the net revenue as a tax and the balance of gross revenue as payment for services rendered; although in view of the complications resulting from the existence of unremunerative services, and the failure to make proper allowance in respect of the capital employed in the service, such a course is unscientific and misleading.
"The whole of the receipts from the various sources administered by the Post Office has always been treated in our Public Accounts as 'Non-Tax Revenue.' It is all carried to the Exchequer; and the whole cost is annually provided by Parliament. Therefore, to omit altogether this public receipt from a classification of taxes would seem to be the natural course to take. But the charge which is made for the carriage of letters, telegrams, and parcels, so far as the Post Office services are a State monopoly, is unquestionably 'an obligatory contribution by persons in respect of or incidental to something which they do.' Accordingly, to take no account of this charge, which nobody can avoid, would be to omit something which falls within our definition of a tax. At the same time it is obvious that to treat the whole of the Post Office revenue as a tax would for present purposes be misleading, inasmuch as the amount actually expended by the State represents direct and immediate service rendered to those who write letters or send telegrams. Regard being had to these considerations, when balanced one with another, it appears to me that the least incorrect course to adopt is to treat as a tax the amount by which the revenue derived from Post Office services exceeds the cost of administering those services."—Sir E. W. Hamilton, K.C.B. (Memoranda on Classification and Incidence, p. 36).
See also p. 361, n. 2, supra.