18. Mr. Edward M. Taylorasked the Chancellor of the Exchequer what information he has on the effective percentage rates of taxation on profits levied by the Burmese Government on British companies in respect of their operations in Burma.
§ Mr. MacDermotI understand that such profits are charged to Burmese tax on the slice system at rates that rise to 99 per cent. on the slice of profits exceeding 300,000 kyats (or £22,500).
Mr. TaylorDoes the hon. and learned Gentleman agree that such excessive taxation really amounts to de facto expropriation without compensation? Does he further agree that if no firm action is taken to protect British investments abroad in this way, there is a real danger that other nations will be tempted to buy their way out of their economic difficulties by seizing 1037 British assets and offering unreasonable compensation?
§ Mr. MacDermotAs to the first part of that question, I agree. As to the second part, the way in which we can best assist companies and persons in Burma is by improving our relations with them, which is what we are seeking to do.
§ Mr. MaudlingIs the Financial Secretary further aware that the position of British companies operating in countries like Burma with a high internal tax structure would be gravely affected by corporation tax?
§ Mr. MacDermotI cannot see how they will be gravely affected if they are already paying tax at 99 per cent.