HC Deb 07 December 1920 vol 135 cc1910-1
56. Lieut.-Colonel POWNALL

asked the Chancellor of the Exchequer whether he will have inquiries made as to the working of the tax on business turnover now in force in France with a view to the possibility of its adoption in this country in lieu of Excess Profits Duty?

64. Mr. HURD

asked the Chancellor of the Exchequer what is the exact character of the turnover and profits taxes in force in France; whether he has received information of the successful working of this French system; and will he call for a Report upon it for the information of Parliament?


With the permission of my two hon. Friends I will publish the answer in the OFFICIAL REPORT. I will now add only this. The French tax has not been sufficiently long in force to justify any close or special inquiry into its practical administration and full economic and financial effect. That is, I understand, the view of the French Government.


Has not the Excess Profits Duty been long enough in force to prove its utility? Does the right hon. Gentleman propose to continue it?

The following is the Answer promised:

A tax on business turnover was imposed in France with effect from the 1st July last. It is imposed on the turnover of all merchants and manufacturers. The liberal professions, agriculturists, employés, and certain distributive cooperative societies are exempted. The sale of bread, the sale of stamps and Government monopolies, receipts under scales of charges fixed by law, and certain transactions which are otherwise taxed are excluded from the taxable turnover. Exports are exempted, imports are specially taxed. The rate of tax is in general 1.1 per cent., but is raised to 3 per cent, on the receipts of "semi-luxurious" and to 10 per cent, on the receipts of "luxurious" hotels and restaurants, and to 10 per cent, on certain luxuries. Monthly returns of turnover are required from taxpayers. In the ordinary course of their duties the Revenue authorities in this country are keeping themselves acquainted with the text of the law and official instructions issued to the public in connection with the duty. The tax has not, I think, been sufficiently long in force to justify any close inquiry into its practical administration and its full economic and financial effects. The tax on commercial and industrial profits is part of the French Income Tax system. The amount assessable is the profit of the previous year. There is an abatement of three-quarters of the first 1,500 francs of the profit, and half of the next 3,500 francs. The rate of tax is 8 per cent. There is a small additional tax, based on turnover, included in the Income Tax laws. This tax is at a rate rising from .1 per cent, to .5 per cent, and is charged only on the excess of the turnover in the year over 1,000,000 francs. The French tax on war profits came to an end as at the 30th June last.