§ 20. Mr. C. S. Taylorasked the Secretary of State for Foreign Affairs why we reimburse representatives of foreign Governments in the United Kingdom to the extent of £800,000 in respect of Purchase Tax; and whether the same consideration applies in respect of tobacco or alcoholic drinks bought in this country by such representatives.
§ Mr. NuttingAlmost all this sum represents refund to United States service authorities in the United Kingdom of Purchase Tax on supplies bought in this country for the use of the United States forces. A small part represents refund of tax on certain classes of British goods 209W used for the installation or re-equipment of the official residences of heads of diplomatic missions in London. It does not apply to tobacco or alcoholic drinks, on which there is no Purchase Tax.
Remission of Purchase Tax on the sale of British goods earns foreign currency, especially dollars, for this country. I am advised that by remitting in this way, we avoid the practical and technical difficulties of outright exemption.