CAPITAL LEVY

Dominion, Volume 31, Issue 22, 21 October 1937, Page 11

CAPITAL LEVY

Unprecedented Action In Italy CABINET DECISION Taxation Increases Will Yield £100,000,000 MEETING COST OF WAR By Telegraph—Press A&sn.—Copyright. (Received October 26, 7.30 pjn.) London, October 19. Cabinet has imposed an extraordinary levy of 10 per cent, on the capital and l stock of all Italian companies. A capital levy is unprecedented in Italy. Cabinet has also increased the duty on estate and ordinary business transactions from 2J per cent, to 3 per cent. A measure has been passed providing encouraging concessions for foreign investments in Italy before the end of 1939. The “Daily Telegraph” says the capital levy has not affected London as British commitments in Italy are negligible. Nevertheless, the _ action has caused some pessimism as it indicates that Italy, had reached the end of her normal tax resources and has decided to adopt desperate financial expedients. In Rome the Government’s decision to impose the levy was announced only after the stock markets closed. It was received with sullen resentment. The Rome corespondent of “The Times” says; “Even the Government apologists do not pretend that the levy will be popular, but they justify it on the grounds that all forms of property benefited from the devaluation of the lire.

Companies possessing a capital of more than £1,000,000 are permitted to pay the levy in the form of shares, while companies showing losses over the last three years pay only a quarter of the levy.

The capital levy and other increases in taxation are expected to yield £100,000,000, which is being used to meet the cost of the Abyssinian war and rearmament.

Cabinet also approved a special measure to attract foreign capital to Italy, including freedom from the inheritance tax and assurances that investments will not be confiscated or the free disposal of them be limited in time of war.

Cabinet decreed the creation of three colonising bodies to settle Italian agricultural workers in Abyssinia. Special provision is being made for the organising of a Fascist militia in Abyssinia and other African colonies.