PURCHASE TAX

Wairarapa Times-Age, 3 May 1940, Page 5

PURCHASE TAX

BRITISH CHANCELLOR’S

PROPOSALS

SACRIFICES INEVITABLE.

CALL ON MODERATE INCOMES.

(British Official Wireless.) RUGBY, May 1

.Tn asking the House of Commons to approve of the Budget resolution relating to the proposed purchase tax, the Chancellor of the Exchequer, Sir .101111 Simon, said that on the second reading of the Bill, which he hoped to present in the form in which it 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, he said, 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 the tax at a point between the wholesaler and the retailer and dealt with the exemption to be accorded to food, drink, fuel and public utilities and 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 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. The extent of the sacrifices which the war ell’ort would require from all classes was likewise emphasised .by Sir John Simon in speaking on the resolution regarding income tax. Replying to Opposition suggestions that the 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 five pounds a week or less, so they must face the fact that there would have 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. Thev must let the lowest of all have such protection as they could give them because they had so little. He was, however, sure that the House and the country were never going to fail to accept any or every burden proposed so long as it was necessary to win the war. Following Sir John Simon in the discussion, Mr Pethick Lawrence expressed keen disappointment that the Chancellor had not given more’information. The House and the country had been in the dark for a long time. He feared the tax would have a serious effect on the cost of living. The Financial Secretary to the Treasury, Captain Crookshank, said the House as a whole was reserving its j udgment on the purchase tax.