MOTOR CAR TAX

Auckland Star, Volume LXXVI, Issue 11, 13 January 1945, Page 7

MOTOR CAR TAX

CHANGE IN BRITAIN

EXPORT TRADE BENEFIT

WELLINGTON, this day.

As anticipated, the British motor industry, after many years of endeavour, has succeeded in bringing about a change in the taxation formula on motor car engines, the basis of which for so long has proved a handicap to the manufacturers of cars in Great Britain, particularly in regard to her export trade- in automobiles. It has been cabled that the Chancellor of the Exchequer (Sir John Anderson) announced in the House of Commons that the motor car tax will be changed after January 1, 1946, from the current basis of horsepower (which took only the bore of the engine into consideration) to the cubic capacity of the power unit (bore multiplied by stroke) at the rate of £1 for every 100 cubic centimetres of engine capacity. The decision of the British Government will be welcomed greatly by most ■ car manufacturers in that country, and particularly by those concerns keen on developing their export markets. The major reason why the planned change has been brought about was that the British h.p. taxation formula compelled manufacturers to design a small bore and a long stroke engine to minimise the excessive horsepower tax operating in that country. The result has been that most of the cars made in England for many years past have had relatively small engines. Good though these small machines have been and are—in fact, they are the best of their type in the world—they have not fully met the market requirements of certain countries to the detriment of Britain's overseas trade. The change-over when it comes, says the Dunlop Bulletin, should undoubtedly help to improve substantially Britain's export trade in cars. The twelve months which will elapse before the new formula comes into force will give British car makers time in which to redesign their engines—in itself no small task.