NEW PROFITS TAX

Otago Daily Times, Issue 23220, 18 June 1937, Page 9

NEW PROFITS TAX

COMPANIES AND BUSINESSES PROFESSIONS NOT AFFECTED ESTIMATED RETURN £25.000,000 (British Official Wireless) (United Press Association) (By Electric Telegraph—Copyright) RUGBY, June 16. The terms of the new profits tax to replace the withdrawn national defence contribution has been issued as a White Paper, and the necessary ways and means resolution will be moved by the Chancellor of the Exchequer on Monday. A tax at 5 per cent, for companies and 4 per cent, for businesses carried on by individuals will be charged on profits arising in the five years' period from April last. The tax will not apply to professions. Subject to necessary adaptation the profits will be determined on the same lines as for purposes of income tax. The tax will not be chargeable when the profits do not exceed £2OOO. Where they exceed that figure, but do not exceed £12,000, an abatement will be allowed of one-fifth of the amount by which the profits fall short of £12,000.

Provision will be made for remission of the tax, whole or part, in cases where the commissioners for special areas certify that it is expedient for the purpose of establishing industrial undertakings in those areas that relief be given.

The tax will be deducted in computing the profits of trade or business for the purposes of income tax. No calculation of capital will be necessary for any purpose connected with the tax.

It is estimated that in a full year the tax may be expected to produce £25,000,000.

COMMENDED BY THE PRESS

LONDON, June 16,

The press commends the new tax as simple and straightforward and an improvement on the one dropped. The Daily Telegraph points out that taxation of growth of profits gives way to taxation of all profits, so recovering trades and new enterprises will not be the special victims. Businesses are not left in a state of uncertainty regarding the amount to be paid.