Fiscal Dependency in British Malaya, 1890s–1920s

Abstract

This chapter turns to Malaya, another site of British rule, where the monopoly was introduced more than a decade later in 1910, without expressed concerns about indigenous opium consumption or sumptuary restrictions. It shows instead how the British colonial state was highly reliant on opium revenue; and the monopoly emerged as local administrators were reversing longstanding acceptance of such dependency as a natural condition of colonial government. Over the course of several decades, taxing opium sales became conceived of as an untenable practice and challenge to fiscal order, culminating in the introduction of an opium revenue reserve fund in 1925 to enable the substitution of opium taxes. Officially, its declared purpose was to reduce reliance on opium taxes for one of the most fiscally opium-dependent territories of Southeast Asia under European rule, by setting aside a large sum of surplus revenue to which a fixed ten percent share of subsequent years' revenue would be added. The fund was first introduced in 1925 for the Straits Settlements of Singapore, Malacca, and Penang, as well as the Malay State of Johor, and extended across the Federated Malay States by 1929.