NEW BUDGET TAXATION

Southland Times, Issue 23182, 24 April 1937, Page 7

NEW BUDGET TAXATION

NATIONAL DEFENCE CONTRIBUTION REPLIES TO CRITICISM (British Official Wireless) RUGBY, April 22. There has been considerable criticism, particularly by Conservative members in the House of Commons, of certain features of the new taxation on rising profits which was announced in the Budget. Points raised by the critics of the national defence contribution were dealt with last night by Mr D. J. Colville, Financial Secretary to the Treasury. • ■ Those liable to this new tax which apply to all companies, firms and individuals making over £2OOO a year profit will be entitled to elect to pay either upon the growth of profits compared with the average for 1933-35 or on any excess of their profits above a return of six per cent, on their capital in the case of companies and eight per cent, in the case of individuals and firms. It is proposed that the tax should be graduated from one-fifth to one-third of the growth of the profits proportionately to the actual level of prosperity, the highest rate being payable in respect of returns on capital exceeding 15 per cent. Mr Colville said the capital would be a valuation of the assets employed in the business, less such items as debentures and loans. Reserves would not be included rmless invested in assets employed in a business. The profits would be as assessed for income tax, less the interest on debentures on loans, but not the interest on preference shares. He noted that the tax would be temporary and added that although the Government would have liked to distinguish between armament firms and others it was not practicable. The newspapers anticipate that many amendments to the national defence contributions proposal will be advanced when the Finance Bill comes under discussion and that meanwhile consultations will take place on certain aspects of the proposal. It is, however, stated in the Press that the Government Whips are satisfied that, in principle, the new impost will be endorsed by an overwhelming majority of Ministerial votes when the division is taken. NO DESIRE TO CREATE INJUSTICE ELASTICITY WANTED (Received April 23, 11.35 p.m.) LONDON, April 23. In the House of Commons the Chancellor of the Exchequer (Mr Neville Chamberlain) after listening to a crossfire of criticism said it was necessary for the country to realize that the total cost of rearmament cannot be cast on posterity. Everyone must hope that means may be found of ending the armaments race. Referring to the national defence contribution, he said: “It is not intended to be a crippling or penalizing tax or to create an injustice between one class of firm and another. If I can be allowed to make inquiries to ascertain possible dangers then I had better have a certain amount of elasticity to conform with what may come to my notice.”