PROFITS TAX.

Auckland Star, Volume LXVIII, Issue 146, 22 June 1937, Page 7

PROFITS TAX.

BRITAIN'S IMPOST.

Overseas Trading Companies

Concerned.

DOMINIONS MAY BE INVOLVED,

t- mtod Press Association.—Copyright.

(Received 12.30 p.m.) LOXDOX, June 21

An explanation of the operation of the new defence profits tax, yielding £25,000,000 in a full year, was given by the Chancellor of the Exchequer, Sir John Simon, when moving its adoption in the House of Commons. He said it would be charged on profits of trades and businesses carried on in the United Kingdom, also on those carried on outside, by those resident in Britain. Sir Alan Anderson (C'on., City of London) objected to its application to companies trading abroad with shareholders throughout the world, simply because they had their headquarters in London. It was important, lie said, to encourage businessmen operating abroad to locate their headquarters in Britain. Mr. R. Boothbv (Con., Aberdeen) raised the point whether the Dominions would accept tlie tax as part of production costs or would the sum paid in tax be the subject of full Dominion income tax .' If so, these companies would be put to serious disadvantage iu relation to their competitors who had no offices in London or did not operate overseas. The resolution was passed by 231 to 98 votes. An influential group of members of Parliament representing important citv interests is pressing the Prime Minister to appoint a Royal Commission to drawup plans to prevent, or, at. least, to mitigate, the next slump. The Government thus far has not conceded that Government action can influence a trade depression, but the opinion is growing that it is necessary to plan machinery to deal with the situation, which is likely to arise on completion of the Government's rearmament programme.