REVENUE OVER ESTIMATE

Dominion, Volume 35, Issue 171, 16 April 1942, Page 6

REVENUE OVER ESTIMATE

Fresh Taxes Imposed DOUBLE DUTY ON ALL ENTERTAINMENTS

LONDON, April 14.

The Chancellor of the Exchequer, Sir Kingslev Wood, in his Budget statement said that the total revenue for 1041-42 was £2,074,000,000, which was £288,000,000 over the estimate, against a total expenditure og £4,776,000,000. Gross personal savings were £640,000,000 in 1940 and £909,000,000 in 1941. Revenue for the past year had exceeded his expectations. The entertainment tax was to be doubled, except in the case of cinemas where the new duty would be still higher in some cases. Taxes on certain luxury goods, including silk frocks, fur coats, jewellery, cosmetics and gramophone records were to be substantially increased. ••Personal incomes below £5OO represent nearly 85 per cent, of all personal incomes after payment of income tax and super-tax.” he said in announcing that income tax had already reached 'its limit and would remain at its previous level. “I stress these figures to show where the bulk of the national purchasing power now lies and to deal with any suggestions that the financial claims of the country can be met from the incomes of the rich,” he added. In tlie international sphere of British financial affairs, he said, the most striking fact to look back upon was the full 12 months of lend anil lease, assistance. The scale of these deliveries was already a vital factor in the war effort. Up to February this year, the assistance given in this way to all countries was not far short of £650,000,000, of which the greater part was given to Britain.

The figures to Britain alone, up to March 31, were likely to reach £600,000,000, and the rate of £100,000,000 monthly was now reached. From a domestic viewpoint, while the supply of goods was much curtailed and there was need to conserve shipping, many incomes of the community as a whole were much increased. Neither saving, nor taxation, nor limitations of supply, would solve the economic wartime ‘problems if the price structure was allowed to get seriously out of ' ,U Food Prices Reduced. The price levels of the main staple foods had actually been reduced. The food index last April was 23 per cent, above the level at the outbreak of war. Now it was only IS per cent, above the old level. The cost of living index had risen only 29 per cent, above the prewar level—l per cent, above last year s ligure. This considerable success in price stabilization had cost the Exchequer £125,000,000 in the past year, but the fo'tire would be higher in 1942 because Of increased farm wages and the rising tendency in the overseas markets. The recent introduction of tax reserve certificates had proved very successful, the figure reaching a value of over £200,000.000. The national expenditure —apart from a vote of credit —estimated at £707,000,000, had been £091,000,000. The vote of credit, estimated at £3.800.000,000, had- reached £4.085,000,000. The excess of revenue was the result mainly of an excess of £60,000,000 over the estimate of national defence contributions and the excess profits tax. the total excess in direct taxation being £76.000,000. The purchase tax, estimated at £70,000,000, had produced £98,000,000. Tax On Wages. Dealing with the income tax of wage eariiers, Sir Kingsley Hood said that there had been complaints about the methods of collection. Before the war, about 1,000.000 wageearners bad paid about £2.500.000, and in 1941 about 2,500.000 wage-earners paid about £30,000.000, while in 1911-42 wage-earners numbering 5.500.000 paid £125.000,000. of which £6O 000.000 was treated a.s post-war credits. A new form of income tax was about to be introduced which would be simpler and be of great help to tlie wage-earner in making the necessary adjustments. Regarding married women in employment, personal allowance of £l5 would be raised to £SO during (he period of the war. The Chancellor estimated the total expenditure in the coming year at £5.286.000,000, an increase of £510.000.090 over the actual expenditure last year and the estimated yield from existing income tax to be £915,000,000, the surtax at £78,000,000, death duties al £90,000,000. and excess profits tax and national defence contributions at. £120.000,000. the: total revenue in 1942--13 being estimated at. £2,244,000,000. Purchase Tax Exemptions. Utility clothing, and- hoofs and shoes will be exempted from the purchase tax with a consequent loss- of revenue of £10.000.000, rising to £20,000,000 when the tax is in full operation. 'The Chancellor then said that the last series of imposts and the widening of the area of taxation had been 100 recent to contemplate further exactions at, the moment, so lie must :nrn tu articles in common use which 'v-'dilil lend themselves Io his purpose without infringing mi I lie wartime :: n <M‘.ssitles rd.' life.

The price of beer, the eonsuiuption of which had been increasing, would

be raised by 2d. a pint, with an addition to the revenue of £42,000.000 in the coming year and £48.000,000 in a full year. Whisky would be taxed a further 4/8 per bottle. Further duties would be placed on foreign and Empire wines. The increase in the tobacco duty would raise the price Old. and 71(1. an ounce, making an extra 3d. on an ordinary packet of cigarettes. Cigar prices would increase accordingly. Double Duty On Entertainments.

Double duty would be charged on every form of entertainment except the lowest-priced seats, the Chancellor explaining that nearly 90 per cent, of the existing revenue from entertainment duty came from attendance at the cinema.

The duty was estimated to yield £14.000,000 in a full year, and £12,000,000 in the present yetu. Finally, Sir Kingsley Wood proposed to deal more severely than at present with expenditure on luxuries and non-essential goods, doubling the existing tax. He quoted, as an illustration of the goods to which this increase would apply, silk frocks, silk or brocade fabrics, fur coats, ornaments such ns vases, china figures, cut glass, hair-waving and hair-drying appliances, electric shavers, trunks and bags (if made of leather and hide), musical instruments and gramophone records —not wireless sets —clocks, watches (if made of platinum, gold, or silver, or gold plate), jewellery and imitation jewellery, toilet articles such as flapjacks and vanity eases, perfumery, and cosmetics. The Chancellor concluded: “1 can claim with some confidence that my proposals will enable us to continue to maintain our financial stability and social security throughout the coming year. The increases in taxation which 1 propose are indeed essential for the prosecution of the war. "I am convinced that, in that spirit, they will be accepted and willingly borne, and I commend lhem to the House as yet another vital contribution to the victory of i lie United Nations.”