1940-04-24 — Page 6

Page

BRITAIN'S

THE CHINA MAIL, APRIL 24, 1940

BUDGET

Sir John Simon Rejects Compulsory Savings ***

(Continued from Page 5)

the Exchequer.

E.P.D.

The machinery operating the excess profits tax was being made more ef

BEER, TOBACCO AND MATCHES just over £2,000,000 and in a full year

The increase on

In the realm of indirect taxation, he £2,185,000. proposed to add to existing duties.on

TELEGRAMS TOO beer, spirits, tobacco and matches.

beer would be

In the inland telegraph service there roughly equivalent to a penny per would be a fixed additional charge of take effect from 13d on each, ordinary priority or greet- pint, which would

This increase inge telegram; on each night "tele- to-day · (Wednesday). tax-

in the beer duty, he estimated, would graph letter and on each page of a produce £18,000,000 in a full year and press telegram. £15,000,000 in the current financial

Acient but it must not be imagined the changes involved constituted merely a list of concessions to payers.

They did not. There would be con- sideration for concerns belonging to depressed industries.

In view of war conditions they must postpone general revaluation of properties for assessment for in- come tax, which otherwise should

have been made this year.

Sir John also proposed an amend ment to the legislation to deal with certain forms of estate duty avoidance. In regard to customs and excise, he proposed to introduce legislation on two points.

KEY INDUSTRIES DUTIES Firstly, to assist the export trade by improving conditions on which a drawback was payable on exported goods which had been subject on im- portation to key industries duties.

The second proposal would relate to the margin of preference on Em- pire sugar, the stability of which was related to the operation of the In- ternational Sugar Agreement of

1937.

Object of the legislation would be to make it clear that the present pre- ference would continue to the end of August, 1942, the period originally contemplated under the agreement.

NEW TAXATION

It was, however, necessary to impose additional taxes to increase the total of £1,133,000,000 of revenue which would be produced if they confined themselves to the provisions enforced last year...

f|

Sir John said he must therefore look both to direct and indirect taxation.

"In the field of direct taxation must bring into actual operation the proposals for increasing standard rates and reducing allowances which I in- dicated in advance last September.

"then said we should not limit

our view to six months alone. Ac- cordingly.1. propose in the Finance Bill to raise the standard rate of Income tax from 7/- to 7/8d.

SEVERE INCREASES

"These are very severe increases which will put a heavier burden on direct taxation in this country than the direct taxpayer has ever been called to pay before.

"The standard rate of tax will have been increased within a single year from 5/6d to 7`6d. With the surtax added the maximum rate will reach 17/- in the pound.

year.

A box of 50 matches now costing a penny would cost 11⁄2d.

There would also be an increase of 25 per cent. for private telegraph: ser- vices, to operate from July 1.

These Increases in the inland tele- graph services were estimated to yield £160,000 this year and £240,000, in a full year.

These proposals, which would take effect from April 29, would produce this year rather more than £3,500,000

No increases were proposed in and in a full year £4,000,000.

There would be countervailing in-charges for overseas telegraph and creases in the duties on mechanical telephone services, which were neces-

sarily limited in wartime. - - lighters..

POSTAGE JUMP Regarding the post office charge the general scheme was to increase cer- tain initial postal charges but to leave all charges for excess weight untouch- ed.

The initial rates for Inland Post would be increased as follows:

For letters to two ounces, « from

11⁄2d to 21⁄2d. Postcards from 1d from 2d.. Printed papers by d per

packet.

Newspapers by d.

There would be similar increases for letters in the Imperial Post except that present rates would be retained for correspondence with the forces overseas.

The rates for foreign post will be increased as follows:

For letters, from 21⁄2d to 3d; post- cards from 11⁄2d to 2d.

The spirit duty would be increas- ed by 15/- per proof gallon, mak- ing. It 97/6d. The ruling price of a bottle of whisky was. 14/3 and the increase would be equivalent to an addition of 1/9.

Sir John thanked the French Gov- ernment for agreeing to waive their treaty rights and permit the increase to apply to French and other import- ed spirits.

The increased duty on spirits, which would take effect from tó-day (Wéd- nesday), would yield £7,000,000 in a full year and £6,500,000 this year.

THREEPENCE AN OUNCE

All increases in post office charges, taken together,

were estimated to yield £12,500,000 this year and £14,- 500,000 in a full year.

Sir John then referred to a "novel proposal" to provide additional venue.

Purchases Tax

*

re-

"Sales taxes of different kinds are in operation in a large number of countries and in most of the Domin- ions, I think, but methods and ma- chinery differ considerably.

"The one I am about to propo80 is a purchase tax in the form of a percentage on price which will be pald at the stage when the whole- saler is selling to the retaller.

"One great advantage of applying the tax at this point is that it makes it easy to secure that there shall be no purchase tax imposed in respect of goods for export."

AUSTRALIAN CENSORSHIP

Canberra, To-day.

Drastic regulations have been Issued enabling the Australian Government to supervise news. papers and literature.

Permite must henceforth be obtained before publications will be allowed to circulate.

The regulations embody "drag-net" clause under which a consorship of the severest char- acter may be Imposed. Reuter.

期

this

tioned quantities, even though involved considerable cost to the Exchequer,

They were now spending £60,000,- 000 a year to cheapen the prices of certain essential foodstuffs. The con- trol had taken over a variety of in- dustries and there was contról of foreign exchange.

་

Dividends To Be Limited

Dealing with the excess profits tax, Sir John sald profits would lose a great deal of their value if they were distributed freely as dividends.

"They will be very useful if they are available to assist industries and to repair industry in the difficult period, which will follow at the end of the war, but they will be of far less value if used for increased dis- tribution into the hands of share- aholders who might be tempted to de- vote à good deal of them for the purpose of consumption.

Sir John continued: "There is strenuous drive under the Preal- dent of the Board of Trade to In- create our exports. At the aamo time It is necessary to discourage unnecessary spending at home. "The purchase tax will not touch raw material in industry.

"Another exception is that there will be no purchase tax on food, Including drink or foodstuffs, whe ther for human or animal con- 'sumption..

"There will also be no purchase tax on articles already subject to heavy duty, as tobacco or petrol, or in re- The tobacco duty would be increas- spect of services such as fuel, gas, ed from to-day (Wednesday) by 4-electricity or water. per lb., or 3d an ounce, with cor- responding increases in other duties such as on cigars.

This increase, following the two Increases last year, was severe, but In existing financial -circumstances there was no escape from this addi- tion.

Increased yield from the extra tobacco duty he estimated at £23,000,- 000 in a full year and £21,000,000 this year.

pro-

"Subsequent legislation, will vide for the date of imposition of the tax, and the rate at which it will be applied will be determined by the resolution of the Commons.".

1,234 Millions From Revenue

The yield of extra taxation in the "Nothing on this scale has ever

current year would total £101,000,- been approached before, whether in

000. To that must be added £1,133,- war or peace. 'The highest previous In regard to matches It was pro-000,000 as revenue from taxation on rate of Income tax was 6/in 1918, posed to double the excise duties and last year's basis. and with super tax added, the make corresponding additions to cus- maximum during the last war was toms duties, 10/6d in the pound."

Neither in the Imperial nor the for-" EFFECTS OF TAX

eign, post were any increases proposed. Sir John gave illustrations of the for other classes of mail in view of effects of the proposed taxation, say the importance of those services to the ing that a married man without chil-export trade, dren, if he earned £300 a year, would There would be no increased charges pay £15 income tax instead of £7 last in air mall. year, and £5 the year before.

He also proposed to make some changes in the poundage charge on postal orders,

If he earned £400 a year he would pay £30/12/6 instead of £17/10/0 last year and £12/12/6 the year before. All these postal changes would pro- A £600-a-year man would pay duce this year £10,400,000 and in £92/16/3 Instead of £78/10/0 last full year £11,400,000, year and £56/12/6: the previous TELEPHONE CHARGES, §. year.

In the inland telephone service These changes, together with minor there would be general increase of ones, would produce in this year from 18 per cent. on all charges to sub- direct taxation £42,500,000 and in a scribers with exchange facilities and full year £61,750,000.

to users of the coin box telephone.

This would take effect from May 1Th the o case of trunk calle and all calls from public call offices, and from July If the case" of "rentāla. and miscellaneous, charges... For private t

rvices there would be an

cent. to take

Inland

Another change was in respect of surtax which for 1940/41 he proposed should be charged on income in ex- cess of £1,500 a year instead of £2,000,

There was an enabling provision. It did not increase tak payab

year

by those with Incom

500 and £2,000 but

pos-

sible ta do so in twelve

time

|

for, a limitation

propose accordingly to provide of dividends by public * companies." Legislation would propose that a public com- pany should not distribute a greater dividend on ordinary shares than was distributed on any of its three pre-war years.

A minimum rate on dividends would be allowed in the case of companies which in the recent past had not been able to pay dividends.

In order to make the plan water- tight he proposed to prohibit the Issue of bonus shares during the war (Cheers), save' in cases where entirely exceptional grounds existed such as two companies amalgamat- Ing.

Concluding, Sir John emphasised that the total of £1,234,000,000 which he was seeking to get from revenue this year was the largest figure ever drawn from taxation in twelve months in the history of British finance, and yet it was inevitable.

Taxes In Step

Thus the estimated total contribu-

When total expenditure mounted at tion from revenue was £1,234,000,000. the pace set by modern warfare, taxes

If the preliminary arrangements should keep in step with it. were carried through he hoped to get We were bound this year, according something from the purchase tax be- to his calculation, to contemplate the fore the end of the year.

expenditure of at least £850,000,000 The central question of the Bud-more than the preceding year. get, more Important than taxes, He was drawing £185,000,000 more was how the remaining amount of from taxation. £1,438,000,000 would be provided.

Saving

What was the conclusion?

He was opposed to the suggestion and the lending of savings to the State put forward for a compulsory deduc-must be proportionately increased. tion from Incomes, and he advised -“la is an essentiaf p part. of our war

the House to rely on the result that could be obtained by stimulating to the utmost the response to their existing methods of borrowing.

VOLUNTARY METHODS

That amount would and must be found, and they must foster and im- now of voluntary contributions to the prove conditions under which the Government might be stimulated and inflation avoided,

Whatever measures would to restrict" this poweri, and en

Ina

of

ephone harge

ncreases

It ha

purpose that this should be soḥlev- ád. Provided that the persistence of our people in supporting the present loans, and the resolution of our paople in paying the ": Government taxes is maintained, we have noth

to fear

"Our financial front will be held for: victory, hi Chèers) —Reuter. firmly as any other front in the fight

ITALIAN MISSION ARRIVING IN BERLIN

tor

ing in Berlin