NEW SALES TAX

Timaru Herald, Volume CXLVIII, Issue 21644, 3 May 1940, Page 7

NEW SALES TAX

Burdens Must Be Borne

Criticism In House

British Official Wireless

RUGBY, May 1

In asking the House of Commons for approval lor the Budget resolution relating to the proposed purchase tax. the Chancellor of the Exchequer (Sir John Simon; said that on the second reading of the Bill, which he hoped to present in the form which had been discussed with the trade associations, the House would have full opportunity of examining the scheme, which was something new in Britain's armoury of taxation.

Sales taxes existed in many parts of the world and had been applied with success in the British Dominions. He explained the reasons for his decision to impose a tax at the point between the wholesaler and the retailer, and dealt with the exemption to be accorded to food, drink, fuel and public utilities services. He thought it would be necessary to include clothing, but promised to consider the views of the House.

They were engaged in a tremendous struggle, said Sir John Simon, and it was essential to limit consumption. It was one of his main concerns and responsibilities, when there were enormous additional demands for war purposes, to keep down the demand put forward by civilians.

Replying to opposition suggestions that the income tax on higher grades of income was not sufficiently severe he warned the House that they would have to have recourse before they had done with the war to this instrument of taxation of incomes in a most formidable fashion. It was impossible to suppose that it could operate only at one end of the scale. Not in that way could large additional sums be secured. Just as two-thirds of the whole consumption was by individuals getting £5 per week or less, so they must face the fact that there had to be substantial claims, many of them hard to bear, at the lower end of the scale, though he did not say the lowest of all. They must let the lowest of all have such protection as they could give them, because they had so little. Sir John Simon said, however, that he was sure the House and country was never going to fail to accept every burden proposed as long as it was necessary, to win the war. House in the Dark Following Sir John Simon in the House of Commons discussion of the Budget resolutions. Mr F. W. PethickLawrence (Labour), expressed keen disappointment that Sir John Simon had not given more information. The House and country would be in the dark for a long time. He feared that the tax would have a serious effect on the cost of living. The Financial Secretary of the Treasury (Captain H. F. C. Crookshank), said that the House as a whole was reserving its judgment on the purchase tax.