INCREASED TAXATION

King Country Chronicle, Volume XXXIII, Issue 4818, 2 August 1939, Page 5

INCREASED TAXATION

BIG PETROL TAX INCREASE INCOME TAX PROPOSALS. FINDING £2,500,000. The Government has been faced with the problem of increasing the revenue from taxation by £2,500,000, stated the Prime Minister, Rt. Hon. M. J. Savage, in the course of his Budget address last evening. To meet the position it is proposed to obtain a further £1,000,000 from income-tax, £200,000 from additional death duties, £300,000 by increasing beer duty from Is 3d to Is 9d a gallon, and £1,000,000 through raising the petrol tax by fourpence a gallon. For individuals the present rate of income tax is Is 8d in the pound, increased by 1/100th of a penny for every pound of taxable income up to £5500, and thereafter by l/150th of a penny up to a maximum of 8s 2d in the pound for earned income. On unearned income these rates are increased by one-third. To obtain the additional revenue it is proposed to increase the basic rate by fourpence, making it 2s in the pound, and to continue the graduation beyond £5500 at l/100th of a penny instead of 1/150th of a penny as at present up to a- maximum of 8s 7d in the pound reached at £7900. At the same time the amount of the general exemption will, be reduced from £2lO to £2OO. This will have the effect of bringing within the scope of the tax a few more single men without dependents, and of increasing the taxable balance of all other taxpayers by £lO. In regard to companies, the basic rate is to be raised from Is to 2s in the pound to bring it to the same level as proposed for individuals. The rate of graduation, however, is to be reduced, from the present rate of 1/100th of a penny in the pound up to £5500 and l/150th of a penny thereafter up to a maximum of 7s 6d in the pound, to a rate of 1/125th of a penny in the pound up to a maximum of 7s lid reached at £8875. More Revenue. Later this session, an amendment to the Land and Income Tax Act will be introduced to correct, a number of anomalies. This Bill will include a repeal of the provision exempting from income tax the income of farmers from land in cases where the holdings do not exceed an unimproved value of £3OOO. These amendments, however, will apply not to tax payable in February next, but to the tax payable in the following year. To obtain the £200,000 from death duties, it is proposed to increase the scales for estate succession and gift duties by approximately 20 per cent., discontinue the present exemption of £IOOO for life insurance moneys, and slightly reduce the present exemption for estates passing to widows. In regard to the proposed increase in beer duty he mentioned that the rate was Is 6d a gallon in 1934, but was then reduced to Is 3d. Allowing for the effect of the additional taxation, the estimated budgetary position for the year is as follows: REVENUE. Taxation — £ Customs 10,000,000 Beer Duty 1,300,000 Sales Tax •.. 3,500,000 Highways .. ... ..... .. 3,250,000 Stamp & Death Duties 3,480,000 Land Tax 1,000,000 Income Tax 9,600,000 Miscellaneous 190,000 £32,320,000 Interest Recoveries .. .. 2,780,000 Other Receipts .... .... 3,160,000 £38,260,000