War Profits

Horowhenua Chronicle, 17 November 1916, Page 3

War Profits

HOW OUR ALLIES TAX Till J, I. Whereas in Great -Britain war profits are taxed GO per cent, that is. tor every £100 made by merchants and manufacturers from trad® and Internes arising from the war, £60 has to be paid to the State and 45 per cent in New Zealand, our Alios have adopted somewhat different systems of taxation. In France, for instance, the Government has recently introduced a scheme for the levying of a progressive tax on war profits. A typical case is cited of a firm which earns excels profits amounting to ?24.000 m a year. It is proposed to levy 5 per cent on the net £100; 10 r~r ccnt on £1000; 15 per cent on £2000; 20 per cent on £4000; 25 per cent on £12,000; the final stage being a tax of 30 per cent on £40,000. As in this case the firm would not have reached the final stage but only £24,000, the total amount which it would be required to pay nndlcr this would 1 be required to pay under this system as £5080, or an average of slightly over 21 per cent. In Italy the law exempts war profits up to 8 per cent of the capital employed on the production of war material ; but where the excess profits range from 8 per cent to 10 per cent of the capf'tal. the super-tax amounts to 4s per £4 ; from 10 to '15 per cent. 12s per £4; from 15 to 20 per cent. 10s per £4; and over 20 per cent, which is the maximum, the amount payable for every £4 of ex-cess profits is £1 4s. In other words, the highest percentage leviable, also having all-owed for exception! depreciat/on o>f plant and machinery is 30 per cent. It is not quite certain whether Russia has levied a tax upon war profits, but according to a bill prepared by the Minister of Finance, excess profits will be taxed in a similar way. to those of Italy, the taxes being levied according to the ratio of the profits to the capital.