THE CHINA MAIL, APRIL 21, 1987.
THE "NO SHOCKS" BUDGET Tax On Rising Profits As Defence Contribution
Income Tax Raised
To Five Shillings In The Pound
MR. CHAMBERLAIN RELIES UPON
REVENUE BUOYANCY.
Surprising all the prophets, the Chancellor of the Exchequer, Mr. Neville Chamberlain, announc- ed only one new form of taxation and that no- one had predicted when he introduced his sixth, and probably last, Budget in the House of Com- mons yesterday,
MR. NEVILLE CHAMBERLAIN
meter reached the gratifying total of over $29,000,000..
BUOYANT REVENUES Buoyant revenues, he said, were
CHANCELLOR ON
JEREMIAHS
claimed his proposals were well de- signed to exercise a steadying ef- fect in the present phase of re- covery. He had avoided, on the Jone hand, a large increase in tax- ation which would have been ne- cessitated by attempting to defray, without borrowing, the full cost of rearmament and which would have checked and perhaps even reversed the economic revival
On the other hand, he had in- creased taxation with a careful choice of methods and to such an extent as in his judgment would discourage the development of un- healthy and feverish speculation without imperilling or even sér- iously retarding the present - up- ward trend of the national welfare.
CORONATION TO AID
THE ONLY NEW SOURCES OF REVENUE ARE: AN INCREASE OF THREE-PENCE IN THE INCOME TAX
In estimating expenditure, the (WHICH IS THEREBY RAISED TO 5/- FROM 4/9), WHICH IS EXPECTED TO PRODUCE AN ADDITIONAL £13,000,000 A
chancellor had kept the fixed debt YEAR, AND
charge at £224,000,000. Total ex- "A “GROWTH OF PROFIT TAX,” APPLICABLE TO ALL PER- the product of expandin' trade and penditure he put at £862,848,000.
wer. The Turning to the prospective yield SONS ENGAGED IN INDUSTRY, TRADE AND BUSINESS increasing purchasing ・・ WHOE PROFITS EXCEED £2,000 A YEAR. THIS TAX IS EX-exchange equalisation account still of taxation, he anticipated that the had PECTED TO PRODUCE £2,000,000 THIS YEAR AND FROM showed a profit and he proposed to economic conditions which £20,000,000 TO $25,000,000 IN A FULL YEAR.
adhere to the old figure of £224,- given such favourable results last 000,000 as the fixed debt charge. year would continue and be rein- The estimated revenue avail- cheering from the Labour benches. He explained that although there forced by the festivities in connec- able on the existing basis of tax- The Chancellor explained the was a saving on the civil estimates, tion with the Coronation. ation, the Chancellor said was principle would be the same whethe defence estimates showed
Among minor adjustments to the abolition of the £847,950,000 (compared with ther the capital standard or profit excess of nearly £8,000,000, the total the Budget,
1936), which in standard was adopted.
defence issues being £186,000,000, Male Servants Tax is interesting view of
estimated expendi-
nearly £50,000,000 over the previous as it dates from the 18th century. ture of over £862,000,000 left a
year, which figure gave an idea of
"JEREMIAHS" - deficit of £14,898,000 to be met
the amount which would be avail-
and.
that Mr. Chamberlain declared by providing other sources of re-
able for redemption of debt other purposes if circumstances in some Jeremiahs doubted our abill- ty to carry the vast armaments the world had been happier.
Mr. Chamberlain proposed not to burden without wilting under the
strain. include the deficit in this year's ac- counts but to ask for legislative re-
£8$2,000,he est
venue.
Measures for tightening up re- venue collection were also planned.
Actual rates would be:
No tax on profits up to 6 per cent A tax of one-fifth of the growth of profits between six and 10 per
cent.
an
A tax of one-quarter on profits increased by 10 to 15 per cent., and The Chancellor announced the A tax of one-third on the growth abolition of the Male Servants of profits by over 15 per cent. Tax; abolition of one-man _com- There was no further new taxa-lief as in 1931-3.
HEAVY ROAD EXPENSE panies for the purpose of evasiontion and be estimated the surplus
Estimated expenditure on roads of income tax and prohibition at $250,000. so-called “share washing” for
last year amounted to nearly £25,- COMMONS CROWDED
|000,000, and for the current year ît a similar purpose,
The House Commons
Civil esti- Arriving at a new trade agree-
was would be £28,500,000. ment with Canada, resolutions crowded long before the commence-mates amounted to £419,000,000, and would be introduced applying the ment of business. The galleries re- the defence to £198,000,000 to which Ottawa Agreement to the agree-served for peers, ambassadors, dis- must be added £10,000,000 for the ment revising preferential duties tinguished strangers, including the civil supplementary estimates. on certain Empire produced silk high commissioners of the Domin- The defence figure excluded £80,- stockings.
ions, and the public were quickly 000,000 which could ⠀ filled.
of
The strain had fallen at a time when our credit was exceptionally high and revenue was expanding.
There were only two contin- gencies which might disappoint expectations of expanding re-
venue.
The debt charge of De borrowed. from too reckless expenditure upon
One would be some great world disturbance outside our control, which sooner or later involved us in its vortex. The other danger might arise
NEW TAX
$224,000,000 objects not vitally necessary.
Mr. Chamberlain's speech lasted. The Chancellor announced the new Besides Mr. Stanley Baldwin, Pre- brought the total expenditure to
! for an hour and 35 minutes.. Growth of Profits Tax as applicable mier, there were present three form- £862,848,000.- to all persons engaged in industry, er Chancellors of the
The House of Commons adopted Exchequer: Mr. Chamberlain said he
anti- trade and business whose profits Mr. Winston Churchill, Mr. David cipated that favourable economic all the Budget resolutions and the Lloyd-George and Sir Robert Horne. conditions would continue this year debate on the Budget was adjourn- The extra three-pence on income Mr. Chamberlain was loudly cheer- and be further reinforced by the ed until to-day-Reuter. tax would produce $13,000,000, re-ed when he entered the House at Coronation activities. He anticipat
PRESERVING BALANCE ducing the deficit to under 3.42. Reviewing the past year he ed an increase in customs and ex- Discussing income tax, he said £2,000,000.
said that last year, this year and cise duties of over $12,000,000 and he noted that two ex-Chancellors, in The new Growth of Profits Te for several years to come the na- also an appreciable increase in in-recent, speeches, had approved was exceedingly complicated, vary- tional finances must continue to be come tax, death duties, surtax, oil, anticipation, an increase of 3d in ing from one-fifth to one third of dominated by the vast defence ex- tobacco, beef, veal and other taxes, the rate of the tax bringing it to the growth of profits.
penditure.
exceed $2.000 a year.
TRUE SURPLUS
་
in
and
New taxation; however, was un-the round figure of 58. in the pound. Losses in the last four, years
avoidable but the taxpayers' new He could not resist, he observed would be taken into account, said Mr. Chamberlain revealed that contributions would provide an ever amidst laughter, such overwhelming Mr. Chamberlain, and described the realised budget deficit was quickening approach to the goal of authority. That increase would re- the tax as a special temporary £5,697,000, including the amount for safety.
duce his prospective deficit to £1,748,- contribution towards national de-the redemption of debt. But for
STEADYING EFFECT
000.
fence.
the defence expenditure there would In the concluding passages of his Reminding the House of the Bal- He estimated the tax would pro- have been a large surplus after a statement, Mr. Chamberlain adance which the Government had duce £2,000,000- this year and from debt redemption of £13,000,000. The dressed himself to the question of already indicated it desired to see £20,000,000 to $25,000,000 in a full true surplus for the current year the country's ability to carry the preserved between borrowing
of revenue over expenditure, exclud vast burden which the pressure of raising by taxation the large addi- year.
The basis of the new tax would ing debt redemption, was £10,500,-rearmament imposed and he ex-tional sums required in the years be either actual profits in certain
000.
pressed confidence in the continued ahead for defence expenditure, and specified years or percentage of the Inland revenue, and ex-expansion of revenue, correspond-therefore of the longer. view than capital employed; amounting to 6 cise duties realised to expecta-ing with an orderly and regular ad- usual which he, as Chancellor had per cent. in the case of companies
The latter yielded $14,500,- vance of general prosperity. A had to take in this Budget to ob- and 8 per cent in the case of in-1000 over the estimate but the in-great world disturbance might dis-viate repeated changes in taxation, dividuals or firms.
come tax, surtax and death duties appoint that expectation but His Mr. Chamberlain described his search LABOUR ENTHUSIASTIC
were £5,500,000 under the estimate. Majesty's government would con- for a device capable of growth but Details of the new Growth of Stamp duties, which, the Chancellor tinue to use their power and in which would not bear unfairly on Profits Tax mere received with loud (described as a sort of trade barofluence to avoid such disaster. He
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tion.