TAXATION RAISED IN BRITAIN

Gisborne Herald, Volume LXXIV, Issue 22484, 13 November 1947, Page 5

TAXATION RAISED IN BRITAIN

ANTI-INFLATION BUDGET

PROFITS LEVY DOUBLED

INCREASE IN PURCHASE TAX (N.Z.P.A.—Reuter— Copyright.) [(11.30 a.m.) LONDON, Nov. 12. The Chancellor of the Exchequer, Dr. H. Dalton, presented his anti-inflation Budget in the House of Commons today. • The purchase tax on a wide range of goods is increased, the profit tax doubled, duties on wines and spirits raised, beer duty raised Id a pint, and 10 per cent tax is imposed on football pools, betting and dog racing. Food subsidies are to be retained.

Dr. Dalton, in presenting the Budget, said it was the second time within three years that the Government had to present a supplementary Budget. This budget was necessary to strengthen, without delay, the budgetary defences against inflation and narrow swiftly the very wide and dangerous gap in the overseas balance cf payments. A The effect of the measures to that end must increase inflationary pressure by reducing the goods at home without reducing the total purchasing power. Dr. Dalton said the revenue in the first 32 weeks of the present financial year, up to the end of last week, was £2,013,000,000 and the expenditure £1,760,000,000. , , . “We are within £5,000,000 already of what I estimated for the full year,” he said. “There is no precedent for so large a surplus at this time of the year.” Dr. Dalton stated.that national savings since last April had been disapEointing and the withdrawals much too eavy. He hoped for better results in the next few months. , ... “The Government must now deal with the new inflationary pressure which must inevitably be generated by Britain’s action to close the gap in the balance of payments,” he said. We must reduce the total expenditure and increase the total revenue. “The reduction of the armed forces should mean a substantial economy in defence expenditure next year, while the cut of £200,000,000 m the total capital investment Would ease the inflation. said he hoped to get £15,000,000 through accelerated collections of arrears of tax in the last quarter of the present financial year. In announcing the doubling of the profits tax, Dr. Dalton said he regretted the continued inclination of many concerns to declare increased dividends. The doubling of the profit stax from January 1, 1947, would be to raise the rate of 25 per cent on distributed profits and to be 10 per cent on undistributed profits. This would increase the annual yield by £85,000,000, bringing the yield next year to £170,000,00. Dr. Dalton announced that only half instead of the whole advertising expenditure would henceforth rank as allowable expenses against business profits. He added that many' advertisements were a serious waste of money, labour and material. There would be certain exemptions and advertising for export trade and trade technical journals would be on a special footing. The revenue from this source would be £10,000,000 annually.

Dr. Dalton said he increased purchase tax rates in te various groups would be as follows: 16 2-3 per cent to 33 1-3 pre cent. 33 1-3 per cent to 50 per cent. 66 2-3 per cent to 75 per cent. 100 per cent to 125 per cent. The purchase tax rates on motor cars would be unaltered.