§ 36. Mr. GEORGE TERRELLasked the Chancellor of the Exchequer what extent the new tax on war profits will increase the price of every article which the War Office purchases from Home manufacturers; and if he has considered that any increase in the Home price will result in an increase in the price which the Government may have to pay for munitions purchased from America and other foreign countries?
§ Mr. McKENNAI do not agree that the Excess Profits Tax will necessarily cause a rise in the price of articles purchased by the War Office. The second part of the question does not, therefore, arise.
§ 37. Mr. TERRELLasked the Chancellor of the Exchequer if, in connection with the increased Income and War Profits Taxes, full depreciation will now be allowed for all wearing-out and wasting assets; and, if so, whether he can state the basis upon which it will be calculated?
§ Mr. McKENNAThe question of depreciation of wasting assets is eminently one for examination by the Committee to be appointed at the end of the War to inquire into the Income Tax, and at the present time I am not prepared to prejudge the matter.
§ 39. Mr. GRANTasked the Chancellor of the Exchequer whether, as agriculture is to be exempted from the operation of the Excess Profits Tax, all produce of the earth, such as rubber, oil, metals, and sugar, are included in the term "agriculture"; and, if not, why this is not to be done?
§ Mr. McKENNAI presume the hon. Member is referring to the case of companies engaged in tropical agriculture. As stated in my reply of the 28th instant to my hon. Friend the Member for Dumbartonshire, companies engaged in carrying on business abroad and liable to British Income Tax will come within the scope of the Excess Profits Tax.
§ Mr. LOUGHWill my right hon. Friend say on what theory he justifies the exemption of agricultural products?
§ Mr. SPEAKERThat is a matter for argument.
§ 41. Sir C. KINLOCH-COOKEasked the Chancellor of the Exchequer whether, in cases where profits in any business were made but not capable of realisation owing to the outbreak of War, he will make such arrangements as will suspend these profits, which, in fact, are merely book profits, from the operation of the Income Tax; and, if it be necessary to set up any machinery to deal with cases of this kind, will he consider appointing a Committee, under the Treasury control, having power similar to the tribunal which it is contemplated to bring into being in connection with the taxation of war profits?
§ Mr. McKENNAI would refer the hon. Member to the answers given by my predecessor on the 10th and 15th February last, to my hon. Friend the Member for Tynemouth, copies of which I am sending to the hon. Member.
§ 52. Mr. BUTCHERasked the Chancellor of the Exchequer whether the Budget proposals, in reference to the taxation of war profits, apply to the controlled establishments whose profits are already taxed under the Munitions of War Act; and, if not, whether he will state why the war profits of other trades and businesses should be taxed at a lower rate than the war profits of such controlled establishments?
§ Mr. McKENNAThe year in respect of which a taxable excess may arise in connection with the present Budget will be the ordinary business year of account ending on any date from 1st September, 1914, to 30th June, 1915, irrespective of whether a business has subsequently become a controlled establishment under the Munitions Act. The assumption that the Excess Profits Tax will invariably or necessarily constitute a smaller levy than that taken under the Munitions Act is not correct.
§ 58. Mr. HORNERasked the Chancellor of the Exchequer if the profits of most traders and manufacturers in Ireland were considerably lowered by trade disputes and other exceptional circumstances in at least one of the three years on which the assessment of the 1914–5 Income Tax was based, and consequently the effect will be to lower the datum line from which the Excess Profits Tax will be calculated in their cases; and will he take steps to legally empower the independent tribunal which is to fix the datum line to deal equitably with these 993 traders and manufacturers by taking in each case the last three years of normal profits?
§ 59. Mr. TICKLERasked the Chancellor of the Exchequer if co-operative societies have recently made heavy clearances of tea, sugar, and other articles subject to increased duty, by reason of which they are making profit out of the public; and if he will introduce a Clause into his Budget whereby the excess war profits of these societies may be taxed and placed upon an equality with other traders, with whom they are competing for the supplies to canteens and His Majesty's Navy?
§ Mr. McKENNAI would ask the hon. Members to await the terms of the Finance Bill.
§ Mr. HORNERCan the right hon. Gentleman give us any assurance that this question will be dealt with in the Finance Bill?
§ Mr. McKENNAWell, Sir, I shall be very glad to hear representations upon any subject connected with the Finance Bill in the course of next week, when, as the hon. Gentleman knows, the House will not be sitting.