BRITAIN’S TAXATION

Greymouth Evening Star, 28 April 1938, Page 7

BRITAIN’S TAXATION

AIDS TO INDUSTRY -L ’ -■ ■ ‘ ; CHECKING PAYMENT EVASIONS [BRITISH OFFICIAL WIRELESS] RUGBY, April 26. 1 In the course of the Budget speech, introducing his proposals for-increas-ed taxation, Sir John Simon said in his judgment the extra revenue should be met partly by direct, and partly by indirect taxation. The major contribution should come from direct taxation. However, he accompanied the increase! of the standard rate of income tax to 5/6 in the £ by concessions to industry and to smaller incomes. The deduction from profits under Schedule A. for wear and tear, would be increased' by 20 per cent. “This concession would cover many important basic trades, giving a great deal of employment, and was aimed at avoiding any decreases in industrial development. The concession to individual taxpayers—which, the Chancellor estimated, would offset the increase in the standard rate for about 2,000,000 of them with smaller incomes—would have the effect that there would be no increase of the tax on earned income, in the case of a. single person, up to £290 per annum, or in the 1 case of a married man with one child, up to £460 per annum, or with two children, up to £540 per annum. From the increase in income tax he expected £22,250,000 this year, and £26,500,000 in a full year. The increase in petrol tax and the tax on heavy oils would yield £5,350,000 in the cur-[ rent year. Thes higher duty on tea, which would maintain intact the existing margin of preference, would he anticipated, give him £2,750,000 and £3,250,000 in a full year. The Chancellor estimated the revenue, on the existing basis of taxation, at £914,400,000 of which £336,000,000 was to come from customs 1 and excise, and £514,250,000 from the inland revenue. The corresponding estimates for last year were £863,100,000, £333,000,000 and £46,650,000 respectively. Income tax, he estimated, would yield £319,000,000 or £21,000,000 more than last year. With the additional taxation the proposed total estimated revenue came to £944,750,000, giving him a surplus of £352,000.

An important section of the Budget speech was devoted to the subject of tax avoidance, which Sir John Simon defined as fire adoption of ingenious methods for reducing liabil-ity-methods which, although within the law. none the sense defeated: its intention. He announced a number cf proposals for dealing with various practices of this nature, adding that they were intended for minority only. The great majority of taxpayers accepted the national burden without any effort to avoid it. As a nation they, w.eer (entitled to take pride in their general and high standard of actual performance regarding taxation.

The Chancellor said: the net increase in the National Debt last-year was £257,750,000, nominal, of which £203,000,000 was covered by assets count.

As to the increase in the petrol tax of a penny a gallon it may be. noted that the last occasion on' which the tax was increased was in September, 1931, when there was an increase of twopence a gallon, while, earlier in the same year ther had /.also :been an increase of twopence, bringing -the tax to sixpence a gallon. SPEECHES IN COMMONS. [BRITISH OFFICIAL WIRELESS.] RUGBY, April 27. The debate on the Budget was opened for Labour by Mr. Pethick Lawrence, who thought it as a peace time budget, not merely depressing, but deplorable. It placed burdens on every section of the community by adding to taxation and tieing up posterity with increasing burdens of debt. Faltering finance had marked the conduct of the last war, but this, time it had started before the war had begun. The Government was asking for unity and sacrifices. For a policy which would secure the world against war, the Labour Party and the whole country would face great sacrifices, but the Opposition could see no evidence that the policy of Government was one to command the united sentiment of the nation. It seemed rather that they were askingfor sacrifices, not for things of which unity could undoubtedly be obtained, but for the triumph of aggression and suppression of democracy. Sir A. Sinclair for the Liberals described the Budget as austere and honest. There was no doubt that Parliament would pass the defence expenditure, because all parties were convi need of the necessity for rearmament. Foreign Governments would make a great mistake if they reckoned on any faltering, so long as the threat existed of aggression from powers who were still using war as an instrument of national policy. However, he thought the strength of national unity depended on diligence, firmness and resource which the Government have showed in pursuing a construction policy of peace.

Sir Alan Anderson said the Budget was recognised as- a Budget of crisis. He was glad that was so. The fact would reverberate through the world, and the world would realise the nation intended to be strong and united, and would face the consequences. The great Contribution of England to civilisation was the idea of freedom, and he looked upon these annual budgets, as a test of their profession of the desire that freedom and democracy should survive.