HEAVY TAXES

Wairarapa Times-Age, 24 April 1940, Page 7

HEAVY TAXES

IMPOSED IN BRITAIN SIR J. SIMON’S WAR BUDGET INCOME TAX RATE OF 7s 6d. ADDITIONAL CALL ON LIQUOR AND TOBACCO. (British Official Wireless.) (Received This Day, 10.20 a.m.) RUGBY, April 23. Budgeting for £2,667,000,000, Sir John Simon (Chancellor of the Exchequer) announced that the income tax would be at the rate of 7s 6d in the £, as forecast in his emergency- Budget last September. He had previously summed up the nation’s accounts for the last year, saying that the country had spent £1,817,000,000, finding £1,049,000,000 out of revenue and borrowing the rest—£76B,ooo,ooo. He had estimated that he might have to borrow 938 millions, so the result was better than had been expected. Regarding the national debt, they had had to borrow not only to cover the deficiency just mentioned, but also to find £4,250.000 for the statutory sinking fund and also £7,000.000 for trade agreements. The national debt of £8.163,000.000 at the beginning of the year increased to £8,931.000.000 on March 31. Sir John Simon estimated that the changes in income tax would increase the yield in a full year by £61.750,000. He proposed also to add to the existing duties on beer, spirits, tobacco and matches. The increase on beer was one penny a pint; on spirits, 15s petproof gallon, representing a rise of Is 9d in the price of a bottle of whisky. The duty on tobacco is to be increased by 4s a pound. He estimated a yield in a full year of £70,000.000 from the increase in spirit duties and £23,000,000 as a result of the increase in tobacco duty. Sir John Simon also announced an increase in postal charges. The letter rate is to be increased by a penny to 2Jd, and the rate for post cards is to be raised from a penny to 2d. Including changes in poundage on postal orders and inland telephone charges, he estimated an increased yield of £21,800,000. The new rate on matches would bring the price of a box up to lid. SALES TAX PROPOSED. The Chancellor's proposals included a new form of tax which he estimated would bring in a substantial additional revenue. He proposed to call it a “Purchase Tax.” The new tax would be a percentage on price, which would be levied at the stage when the wholesaler was selling to the retailer. It would not apply to food or drink or foodstuffs, whether for human or animal consumption. The registered seller would charge the (ax to the buyer and would be accountable for it. Neither date nor rate had yet been fixed. The tax would put no sort, of obstacle in the way of export trade.

The Chancellor estimated that the total contribution from revenue would be £1.234.000.000.