INCREASED INCOME TAX

Evening Star, Issue 23565, 2 May 1940, Page 9

INCREASED INCOME TAX

FORESHADOWED IN BUDGET DEBATE CHANCELLOR EXPLAINS NEW SALES TAX (British Official Wireless.) Press Association—By Telegraph—Copyright RUGBY, May 1. (Received May 2, at 11.20 a.m.) In asking the House of Commons for approval of the Budget resolution relating to the proposed purchase tax, Sir John Simon said that on the second reading of the Bill, which he hoped to present in the form in which it had been discussed with trade associations, the House would have full opportunity of examining the scheme, which was something new in Britain’s armoury of taxation. Sales taxes existed in many parts of the world, and had been applied with success in the British dominions. Sir John Simon explained the reasons for his decision to impose the tax at the point between the wholesaler and the retailer, and dealt with the exemption to be accorded food, drink, fuel, and public utilities services. He thought it would be necessary to include clothing, but promised to consider the views of the House. They were engaged in a tremendous struggle, and it was essential to limit consumption, It was one of his main concerns and responsibilities, when there were enormous additional demands for war purposes, to keep down the demand put forward by civilians. Replying to Opposition suggestions that the income tax on the higher grades of income were not sufficiently severe, Sir John warned the House that they would have to have recourse before they had done with the war to this instrument of taxation on incomes “in a most formidable fashion.” It was impossible to suppose that it could operate only at one end of the scale. Not in that way could large additional sums be secured. Just as two-thirds of the whole consumption was' by individuals getting £5 a week or less, so they must face the fact that there would have to be substantial claims, many of them hard to bear, at the lower end of the scale, though he did not say the lowest of all. They must let the lowest of all have such protection as they could give them, because they had so little. He was, however, sure the House and country would never fail to accept every burden proposed as long as it was necessary to win the war. CONSERVING EXCHANGE CANADIAN MEASURES OTTAWA, May 1. - (Received May 2, at 9.25 a.m.) . An Order in Council requires residents to sell their foreign exchange holdings to the Exchange Control Board before May 31. The Order also provides for the transfer of the Bank, of Canada’s gold exchange reserves to the board. This action is intended to block the loopholes for the flight of capital and to conserve exchange for war purposes.