Wednesday.
HONGKONG TELEGRAPH
66
April 24
1940.
BRITAIN'S MAMMOTH
MAMMOTH WIN THE WAR"
BUDGET:
£1,234,000,000
IN
SIR JOHN SIMON, CHANCELLOR OF THE EXCHEQUER, PRESENTED HIS SECOND WAR-TIME BUDGET IN THE HOUSE OF COMMONS LAST NIGHT.
HE ANNOUNCed staggering increases in DIRECT AND INDIRECT TAXATION. HE IS MAKING FRESH DEMANDS ON ALMOST EVERY SOURCE OF REVENUE FROM HIGHER INCOME TAX, INCREASED SURTAX AND WHAT HE CALLS A NEW "PURCHASE TAX"; TO ADDITIONAL TAXATION ON BEER, SPIRITS AND TOBACCO, AS WELL AS INCREASED CHARGES ON POSTAL, TELEPHONE AND TELEGRAPH RATES,
THE NEW TAXES IN BRIEF
TAXES
ZURICH AS FINANCIAL CAPITAL
Safest Place In War- Torn Europe
IN BRIEF, BRITAIN FACES THE FOLLOWIing new taXATION TO HELP FINANCE There is much mention in Wall THE PRESENT WAR:
price.
Standard income tax rate increased from 7/- to 7/6d in the £.
Surtax on incomes of £1,500 instead of the previous minimum of £2,000. One penny a pint increase duty on beer.
One and ninepence increased duty on whiskey, which will make a bottle of whiskey cost 16/-retail
Tobacco duties increased by 4/- per pound, equivalent to 3d an ounce, with proportionate increases
on cigars.
Excise duties on matches to be doubled, making a box of 50 matches retail at 11⁄2d instead of 1d as at present.
Inland postal rates to be increased from 11⁄2d for two ounces to 21⁄2d. Printed papers to be increased by 1⁄2d a packet. Newspapers by 1⁄2d.
Postcards from 1d to
Foreign postul rates for letters increased from 21⁄2d to 3d and for postcards from 11⁄2d to 2d. No increase in air mail charges.
SPECIAL TO: THE "TELEGRAPH“. NEW YORK, April 24 (UP).
Street of Zurich becoming the war-time financial capital of Europe.
The Swiss banking and Anancial elly is regarded as Europe's safest haven for tangible capital and pro- perty which can be easily moved In times of war.
Wall Street is critical of the official restrictions which prevent the London and Paris stock exchanges from truly reflecting supply and demand.
Amsterdam remains a free market for stocks and bonds, but the grain markets have practically disappeared as a result of restrictions imposed by The Hague.
A transfer to a government con- trolled Bourse at Zürich, supplement- 11⁄2ded by similar markets at Basle and
Ganeva, is possible if Holland tomes Involved in the war.
Inland telephone increase of 15 per cent. as from May 1 for trunk calls, as from July 1 for rentals and miscellaneous charges.
be-
applied to be determined by a resolui- tion made in the House of Commons."
£101,000,000 Yield'.
The yield of extra taxation in the current year, he said, would total
£101,000,000.
To that must be added £1,113,000,-
year's basis,
A Purchase Tax in the form of a percentage on the price which will be paid at the stage when the wholesaler is selling to the retailer. Sir John Simon says that the one great advantage in applying the ono as revenue from taxation on last surtax at this point is that it makes it secure that there shall be no purchase tax imposed in respect of goods for export.
SEEKS £1,234,000,000 REVENUE
The Chancellor said that he was seeking to obtain from revenue a total of £1,234,000,000 which was the largest figure ever drawn from taxation in a single year in the history of British finance.
because He said this was absolutely necessary they had to contemplate an expenditure of at least! £850,000,000 more than the preceding year.
LONDON, Apr.
(Reuter).- 23 Continuing his Budget speech, Sir the of John Simon, Chancellor
then dealt with the ques- Exchequer, tion of how much would be provided by the continuance of the existing taxes at the existing level.
Finance Bill to raise the standard Lax from seven rate of incama
shillings slx *shillings to Beven
These are very severe In- Dence. creases which put a heavier bur- this direct taxation In den on country than the direct tax-payer. has ever been called to pay before. The standard rate tax will have
With
The yield of death duties was estinated at £80,000,000, and stamp duties at £19,000,000. National De-been increased within a single year fence contributions and the Excess from Ave shillings and six pence to Prof tax, which are alternatives, seven shillings and six pence. were estimated to yield £70,000,000.
If there
here were no Excess Profits lax, they could look for yield of
£28,000,000 from National Defence contributions..
Inland Revenue duties on the exist
basis were estimated to yield ing
£058,000,000-an excess of £75,000,- 000 over what it was last year.
to
in
It was thus estimated that the total contribution from revenue was
£1,234,000,000.
Britain's Revenue and thing from the purchase lax before
Expenditure Since 1913
The income and expenditure of Great Britain for the years since the beginning of the Great War have varied as follows:
1,559,158,000
2,198,113,000
2,000,221,000 2,575,301,000 1,665,773,000 1,196,428,003
1913-14
Revenue £108,243,000
1014-15
226,694,000
.
Expenditure £197,403,000 560,474,000
1915-10
336,767,000
1010-17
573,428,000
1927-18
1918-19
707,235,000 880,021,000
1019-20
1,339,571,000
1920-21
1,425,085,000
1921-22
1,124,880,000
1922-23
914,012,000
1930-31
715,894,975
1935-35
752,020,000
1937-38
875,718,000
847.024,000
1938-39
930,935,000
943,040,000
1939-40
1930-40*
£42,000,000 995,000,000
942,444,000 1,933,000,000 2,668,000,000
1940-41 (ent.) 1,231,000,000
1,070,187 000
812,107,000 799,170,946 749,970,000
Surplus (--)
or Defelt (~~) £750,000 333,779,000 -1,222,392,000 ---1,624,685,000
-1,D88,087,000
-1,650,280,000
320,202,000 + 230,557,000 45,603,000 +101.510,000
23,276,000
2.941,000 28,094,000 12.714,000 156,000 - 938,000,000 ----1,432,000,000
preliminary arrangements were he to get some-
the end of the year.
£1,433,000,000 Doficit
The central question of the Budget, more important than taxes was how the remaining amount of £1,433.000,- 000 was to be provided.
He was opposed to a suggestion put forward for compulsory dedue- tion from Incomes and he advised the House to rely on the result that could be obtained by stimulating to the utmost the response to their existing methods of borrowing.
That amount would and must be found and they must fuster and Im- prove conditions in which the Gow of voluntary contributions to the Gov- ernment might be stimulated and in- ftation avolted,
Whatever measures would help to restrict the misuse of spending power and especially the misuse of Increasing spending power, were of vital importance.
Food Price Control
It had been their polley to secure the price of essential foodstuffs in rationed quantities even though this involved considerable cost to the Exchequer.-
Sir John gave Illustrations of the The increased field from the extra £2000 and in a full year variety of Industries and the control
tion.
the surlux added, the maximum rate will reach 17 shillings in the pound. All-Time Record "Nothing on this seale has ever been approached before, whether
increases in_other_duties such_as_on For private telephone services there “highest- war or peace. The h
elgars.
would be an increase of 25 per cent, They were now spending £00,000,- previous rate of income tax SYDN
This increase following the two to take effect from July 1.
000 a year to cheapen prices in cer six shillings in 1918 and with
Inland telephone charges were tain essential foodstuffs. supertax adiled, the maximunt dur-increases last year was severe but in ing the last war was 10s. Ed in the there was no escape from this add-over
the existing financial circumstances estimated to produce this year just Control has been taken over of a As regards Customs and Excise which produced £400,000,000 in 1939-
Dound,"
of foreign exchange. 40, it is estimated on last year's basis
In the inland telegraph service Dealing with the excess proits tax, effects of the proposed taxation, suy tobacco daty, he estimated at £23, there would be a fixed additional Sir John said that the profits lose a produce this year
£420,000,000. For motor vehicle duties, he
married man without chill-000,000 for a full year and £21.000.- charge of 3d. ing that
on ench ordinary great deal of their value if they were estimated revenue at £35,000,000, dren. if he earned £300 a
year 000 for this year.
priority or greetings telegram on each distributed freely as dividends. would pay £15 income tax instead
With regard to matches It was pro- night telegraph letters and on ench Limitation Of Dividends press telegrams.
"They will be very useful if they fore
make corresponding additions to cus toms duties,
of 25
25 per cent. for. privale telegraph to repair industry in the dimcult services to operate from July 1. period which will follow at the end These increases in inland telegraph of the war. But they are of less services were estimated to yield value if used for increased distribu- £100,000 this year and £240,000 in tion into the hands of shareholders
full year.
who might
be tempted to devote a Increases were proposed in
deni to good to them for the purpose of charges for overeens telegraph and consumption. telephone services which were neces- sarily fluted in war time.
To Absorb Post Office Revenue
Sir John then dealt with Post Office of er last year and £5 the year be-posed to double the excise duties and page of would also be an Increase are available to assist Industries and
There If he earned £400 a year, he would pay £30 12s. 6d. instead of £17, 103. last year and £12. 12s. 6d. the year before.
revenue and disclosed that it had been decided to take the Post Office revenue into the Exchequer..
The machinery operating in the Excess Profits tax was being made more efficient, but it must not be The £000 a year man would pay
of £73. imagined that the changes involved £02, 16s. 3d. instead
125, 0d. constituted merely a list of concessions last year and to tax-payers. They did not. There previous year.
would be consideration for concerns
belonging to depressed Industries.
In view of the war conditions, they musí postpone the general revaluation
of properties for assessment for i income tax which otherwise should have been made this year.
Customs Proforenco
£50.
10%
the
A box of atty matches now costing a penny would cost 1d.
These proposals, which would take effect from April 20, would produce year rather more than £3,500,- 600 and in a full year £4,000,000.
There would be countervailing in These changes, together with
In duties
on mechanical minor ones, would produce in this creases
£42,-lighters. year from direct taxation,
£81,- 500,000 and in a full year
Increased Postal Charges 750,000.
Regarding the post office" charge More Surtax
the general scheme was to increase Another change was in respect of certain initial postal charges but to surtax, which, for 1940-41, he pro- leave all charges for excess weight Sir John also proposed an amend-posed should be charged on incomes untouched. ment of the legislation to deal with in excess of £1,500 a year instead of certain forms of estate duty avoid £2,000. It did not increase the tax payable this year by those with in- In regard to Customs and Excise, comes between £1,500 und £2,000, Sir John proposed to introduce legis-but it made it possible to do so in 12 Intion on two points; (1) To assist monthis time.
In the realm of indirect taxation, export trade by improving the condi- tlons on which drawback was payable he proposed to add to the existing on exported goods which had been cuties on beer, spirits, tobacco and subject, on importation, to key matches
The increase on beer would be industries' duties; (2) The proposal would relate to a margin of prefer roughly equivalent to one penny per
to-morrow.
ance.
Q
on
"I propose, accordingly, to provide for the limitation of dividends by All Increases in post office charges, pubile companies The legislation taken together, were estimated toj propose that a publio company should yield £12,500,000 this year and not distribute
greater dividend ordinary shares than was distributed £14,500,000 in a full year.
Purchase Tax
on any of its three pre-war years. Sir John Simon then referred to
"The
minimum rate on dividends The initial rates for Inland Post"a novel proposal" to provide addi- would be allowed in the case of com-
tional
panies which in the recent past have revenue. would be increased as follows:
For letters to two ounces from
He proposed to call it a Purchase not been able to pay dividends.
"In order to make the plan water- 14 to 24d.
For. postcards from Id to 2d.
"Sales taxes of different kinds are tight he proposed to prohibit the For printed papers by 14. perin operation in a large number of issue of bonus shares during the war, countries and in most of the Domin-anve in cases where entirely excep- For newspaperu by 1⁄4d.
long, I think, but the methods and tional grounds existed such as that of machinery differ considerably.
two companies amalgamating. "The one I am about to propose is Secks £1,234,000,000 Revenue a purchase tux in a form of percent- Concluding, Sir John emphasised
packet,"
There would be similar increases for letters and postcards in the Im- perial Post except that the present rates would be
the forees overseas.
TUN
ence on Empire sugar, the stability pint, which would take effect from pondence with retained for corres-age on the price which will be pald, that the total of £1,234,000,000 which |
of which was related to the operation
of the International Sugar Agree ment of 1937,
This increase in beer duty, he estimated, would produce £10,000,- The object the legislation would 000 in a full year and £15,000,000 in
the current financial year.
be to make it clear that the present preference would continue to the end
Whisky To Cost 16s. A Bottle
The spirit duly would be increased contemplated under the Agreement. by 15y, per proof gallon making it
of August, 1942, the period originally,
It was, however, necessary to im- 97. Od. pose additional taxes to increase the
The ruling price for a bottle, of total of £1,133,000,000 of revenue{whlky was 145. 34. and the increase which would be produced if they con- would be equivalent to the addition fined themselves to the provisions, of Is. Od. enforced last year.
The rates for Foreign Post will in- at the stage when the wholesaler is he was seeking to get from revenue selling to the retailer. One great this year was the largest figure ever crease as follows;
adventage in applying the tax at this drawn from taxation in 12 months For letters from 211⁄2d, to 3d.
point is that it males. It easy to in the history of British finance, and For postcards from 1d, to 2d. Neither in the imperial nor Foreign secure that there shall be no purchase yet it was inevitable, when the total
tax Post were any increases proposed for for export."
imposed in respect of the goods expenditure mounted at the pace set by modern warfare, that taxes should other classes of mall in view of the
Purchase Tax Effects
entirely keep in step with It. importance of those services to the export trade.
"There is n strenuous drive under
the President of the Board of Trade, continued Sir John, "to Increase our exports.
We were bound this year, according
No Air Mail Increases
to his calculations, to contemplate an expenditure of at least £850,000,000 There would be no. increased
more than the preceding year,
He
drawing "At the same time, it is necessary.
Wis
£188,000,000 charges in air mail.
It was also proposed to make some to discourage unnecessary spending at more from taxation.
Must Increase Savings changes in poundage charge on postal home. Sir John Simon thanked the orders. Direct And Indirect Taxation
What was the conclusion? The purchase tax won't touch the French Government for agreeing to All these postal changes would pro- raw material in industry.
The saving and lending of savings Sir John said he must, therefore, waive their treaty rights and permit duce this year £10,400,000 and in a looks both to direct and indirect taxa-the increase to apply to French and full year would produce £11,400,000. will be no purchase tax on food in-Increased.
"Another excepilon is that there to the State must be proportionately other imported spirits.
In inland telephone service there cluding drink or foodstuffs whether The increased duty on spirits, would be a general increase of 15 per for human or animal consumption. Sir John continued: "In the feld of direct taxation, I must bring into which was to take effect from to- cent. on all charges to subscribers "There will also be no purchase tax Provided that the persistence of our actual operation proposals for in-morrow, would yield £7,000,000 for with exchange facilities and to users in articles already subject to heavy people in supporting the present loans creasing the standard rates and a full year and £3,000,000 for this of telephones with coin boxes. duty y as tobacco or petrol or in respect and the revolution of our people In reducing allowances, which I indicat-year.
This was to take effect from May of services such as fuel gas, electrielty paying the Government taxes is 1 in the case of trunk calls and all for water.
maintained, we have nothing to fear. calls from public call offices and from "Subsequent legislation will provide Our financial front will hold es firmly July 1 in the case of rentals and mis- for the date and imposition of the as any other front in the fight for
/tax and the rate at which it will be victory.", (Cheers).
tion.
ed in advance last September.
Tobacco Increases
"I then mid that we should not The tobacco duty would be increase limit our view to six months alone.jed from to-morrow by 4s. per pound Accordingir 1 propose, in thelor 38, an ounce with corresponding 'cellaneous charges,
"It is an essential part of our war purpose that this should be achieved.
they can't come, thank goodness!
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the nonsense you might have been talking if your neighbour's
wife had not caught cold career--so what?
That chair has ruined your social
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