§ The Chancellor of the Exchequer (Mr. James Callaghan)
Finally, I propose to abolish, from April, 1966, the special tax treatment of the Overseas Trade Corporations. That treatment, under which they pay no Profits Tax and enjoy special Income Tax concessions gives excessive advantages to these corporations. The Report of the Royal Commission on Income Tax, in 1920, and the Report of the Royal Commission on Taxation, in 1955, set out not only the case for exemption, but the strong arguments against it. When the scheme was introduced in 1957, we on our side of the House made quite plain that we were opposed to it. The introduction of the new Corporation Tax will, in any case, greatly change the tax background against which these corporations operate and will much reduce the benefits now derived from this scheme.