The Supreme Court of Cape Colony has decided that the
De Beers Company is liable to the Cape Income-tax on the profits made by the sale of diamonds to a London syndicate. This renders the Company liable to double taxation on all its profits, and in all likelihood an attempt will be made to obtain legislative relief. In the spring of this year the English Courts held that it was liable as an English resident to English Income-tax on all its profits, and now the Cape Courts have held that it must pay tax in the Cape on sub- stantially the same profits, since these mainly depend upon the sale of diamonds to a syndicate, the means by which the diamond trade of the world is controlled by the Company. The result is curious and a little hard, for in effect it means that a Colonial company is penalised for fixing its head-office in England. We are against tampering with the Income-tax, and strongly in favour of our present system of taxing foreign income ; but it is worth considering whether in cases where a Colonial company has an English head-office and pays Income- tax in its own Colony, it should be held liable in England to more than the difference between the English and Colonial taxes.
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