§ 73. Mr. SWANasked the Chancellor of the Exchequer whether he is aware that it is a common practice of companies to create large reserve funds and to make issues of bonus shares; that persons liable to Super-tax escape taxation on their proportions of undistributed profits or on profits distributed by way of issues of bonus shares; whether the proposed Corporation Profits Tax will compensate for the loss to the Inland Revenue of Super-tax on undivided profits; and whether he proposes to exempt co-operative societies from the Corporation Profits Tax, in view of the fact that their members are not as a rule liable to Super-tax?
§ Mr. BALDWINMy right hon. Friend the Chancellor of the Exchequer is aware of the circumstances referred to in the first and second parts of the hon. Member' question. While, however, the Corporation Profits Tax may be regarded in some measure as a composition in lieu of Super-tax, it is not justified solely on that ground, and I do not propose to exempt co-operative societies with limited liabilities from the operation of the tax.