XN000022-1993-03-04 — Page 21

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THURSDAY, MARCH 4, 1993

FS: FUEL TRUE.

YES, I THINK IT IS TRUE THAT ON A RANGE OF TAXES LIKE TAX IT SLIGHTLY HELPS INFLATION AS MEASURED BY CPIA, THAT IS

QUESTION:

ANOTHER QUESTION, ON PROFITS TAX. I WONDER IF IT CAN BE REDUCED BY TWO PER CENT? IT WILL HELP TO STIMULATE OUR ECONOMY AND ALSO IT WILL HELP EMPLOYMENT. WELL, THERE WAS A SIMILAR QUESTION A MOMENT AGO, I WONDER IF THAT CAN BE REDUCED BY TWO PER CENT?

OF

BE,

FRANKLY,

FOR CONCESSIONS I THERE IS, ALSO,

FS:

I THINK THE PROBLEM IS THAT THAT WOULD RATHER EXPENSIVE, AND IN LOOKING AT PRIORITIES DIDN'T THINK THAT PROFITS TAX SHOULD BE A PRIORITY. SOMETHING OF A DEBATE AT THE MOMENT ABOUT THE RELATIVE CONTRIBUTIONS PROFITS TAX AND SALARIES TAX TO OUR REVENUE, AND IT IS TRUE THAT THE SALARIES TAX CONTRIBUTION HAS PROBABLY INCREASED SOMEWHAT FASTER THAN THE PROFITS TAX CONTRIBUTION. HENCE, WHAT HAPPENED IN THE LAST COUPLE OF YEARS MAY HELP TO TACKLE THAT PERCEIVED PROBLEM. I MEAN WE PUT PROFITS TAX UP LAST YEAR, MODESTLY, AND THIS YEAR OF COURSE WE HAVE MAJOR CONCESSIONS ON SALARIES TAX. THAT WILL HELP TO REDRESS THAT BALANCE.

CUMMINGS:

AND A QUESTION NOW FROM THE ENGLISH SIDE, GOOD MORNING. HELLO, ARE YOU THERE?

HELLO.

QUESTION:

CUMMINGS: NOW.

YES GOOD MORNING. YOU CAN ASK MR MACLEOD YOUR QUESTION

QUESTION: YES GOOD MORNING MR MACLEOD. YOU MENTIONED LAST YEAR ABOUT PRIVATISATION AS PART OF THE GOVERNMENT'S EFFORT ΤΟ INCREASE EFFICIENCY. CAN YOU KINDLY COMMENT ON THE PROGRESS?

FS: YES, AT THE MOMENT, WE'RE TENDING TO GIVE PRIORITY TO A HALF-WAY HOUSE WHICH IS CALLED TRADING FUNDS, AND I MENTIONED IN MY SPEECH A COUPLE OF EXAMPLES OF THAT. I THINK THE LANDS REGISTRY AND THE COMPANIES REGISTRY WHICH IS NOT PRIVATISATION IN THE SENSE THAT THE OWNERSHIP REMAINS WITH THE GOVERNMENT BUT THEY ARE GIVEN THE REVENUE, THEY HAVE THE INCENTIVE TO RUN THE OPERATION ON MORE COMMERCIAL LINES. WE THINK THAT'S PROBABLY A PRETTY GOOD STEP TOWARDS IMPROVING EFFICIENCY. WHETHER IN THE END THAT LEADS TO PRIVATISATION REMAINS TO BE SEEN.

QUESTION: O.K. MY OTHER QUESTIONS WOULD BE, THE TAX ON TOBACCO, DO YOU THINK THAT IT WILL FUEL SMUGGLING?

FS: I'M CAUGHT IN A SORT OF TRAP IN THE TOBACCO TAX. YOU'RE RIGHT. ONE OF THE PROBLEMS WHICH HAS COME UP FROM THE INCREASE IN TOBACCO DUTY IS THAT THERE IS SMUGGLING. WE ESTIMATE PROBABLY PERHAPS AS MUCH AS 10 PER CENT OF THE CIGARETTES BEING SOLD MAY BE SMUGGLED, SO I'M QUITE RELUCTANT TO PUSH THAT DUTY UP ANY FURTHER UNTIL WE'VE GOT A BETTER GRIP OF THE SMUGGLING PROBLEM. ON THE OTHER HAND, I'M UNDER PRESSURE FOR HEALTH REASONS, OF COURSE TO DO MORE ON SMOKING. I'VE DONE IS A SORT OF, I HOPE WILL HELP SOMEWHAT, I HAVE DOUBLED AMOUNT OF MONEY WHICH IS GOING TO COST, THE COMMITTEE WHICH DEALS WITH HEALTH EDUCATION AS REGARDS SMOKING. I HOPE THAT WILL HELP BUT BEEN RATHER RELUCTANT TO INCREASE THE RISK OF SMUGGLING BY THE TAX.

WHAT THE

I'VE

INCREASING

/QUESTION