British Budget

Hawke's Bay Herald-Tribune, Issue 80, 21 April 1937, Page 5

British Budget

Telesritsh— Pr««jr Aggn.

actual deficit of £5,597,000 [Two New Measures to Assist Tax CoIIection CHECK ON SPECULATION

mr

— Canyriglit. )

(Reeeived 21, 11.30 a.m.) LONDON, April 20. Zn the House of Commons, the Chancellor of the Excheqner, the Rt. Son. Keville Chamberlain, presented the Budget, which showed an actual deficit of £5,597,000. But fot the excess defence expenditure of £8,000,000, he would have ended the yearwith a formal surplus of nearly £2,250,000 after providiflg more than £13,000,000 for redemption of debt. Ihe income tax f ell short of expectations by £1,750,000. This is significant in view o£ the argument that he could have had the money he needed without fresh .taxation if he had been more optimistic. The total realisable revenue was £797,289,000, an ificrease oi £44,369,000. Customs and excise exeeeded the estimate, and stamps provided a record figure. The surtax was dis&ppointiug and showed a drop of £3,000,000. The Post Offtee is expatiding remarkably. It is consideted that these restilts are extremely satisfactory and give an

indication of expanding trade and increase in the national purchasing power. Among the notable increases are spirits, beer, tobacco and oiL The low cost of the Treasury issues saved £20,000,000. It is proposed to ieep the old figure of £224,000,000 as a fixed debt charge. It is intended as a precaution to take power to borrow for th» statutory sinking fund. ' The total expendituxa foz the coming year, excluding self-balanc-ing items, amounts to £862,848,000. Jt is expected that the Cojronation will increase the Customs and excise revenue by more than £12,000,000 compared witb last year. It is estimated that the revenue in the. coming year will be £847,950,000, leaving a prospective deficit of £14,898,000. It is expected that the income tax increase will be £18,000,000, arfd the surtax increase £4,500,000. It is intended to propose two measures to defeat avoidance of taxation; oue, dealing with one-man companies, would be made retrospective for surtax for the year 1935-36; the other will deab-with "bond-washing," by which securities sold at a price covering the accrued dividend are bought back after 'payment of the dividend at a lower price. The licence duty on male servants is abolished. New legislation necessary in conneC tion with the Ottawa agreement will inelude redueing the preferential duties on silk stockings from the Empire. The duty on imported hops will be continued for four years. Income tax allowances are unchanged as a succession of new taxes would only eause a maximum of disturbance. UMEr Chamberlain has aimed at expanding the souree of revenue. The income tax is incressed three-pence, which will yield £15,000,000 for the full year and £13,000, 000 during the current year. Mf Chamberlain annotuieed a tax on businesses whose prOfits exdSed £2000 a year. This ean be described as a national defenCe COfittibtition. The standard of caleulating the new tax will be the profits or the capital employed. Where the profits standard is adopted it will be on the profits for the years 1933-4-5, the charge being on the •mount of the increase 4d. profits. By way of exhmple, on pTofits up to £600 it wfil be nil, befcween £600 and £1000 one-fifth of the gross, between £1009 and £1500 one-quartsr, above

£1500 one-third. Losses since 1933 will be offset against profits. Where the capital standard is adopted it will be on the basis of profits in the case of a coinpany in excess 6 per cent. and in the case of individual firms of eight per cent. The Chancellor expected that tlie profits will Continue to increase for soine tiine. He anticipated a tax yield of £2,000,000 this year and between £20,000,000 and £25,000,000 next year. The Chancellor said he felt no apprehenBion regarding any possible failure of revenue. It would be admitted that the CrovCrnment had played a large part in trade revival. It is estimated that the increased income tax, the profits tax and the abolition of sharewashing Will produce a total of £ll,150,000, resulting in an estimated simplus of £252,000. The profits tax wipfc end with the completiou of rearma^ ment. Mr Chamberlain said he had increased taxation by a method which he fcrnsted would check speculation or foolish activity whicli would destroy or imperll the presenfc upward trend of [national welfare.