§ Major MOLLOYasked the Chancellor of the Exchequer if he is aware that the Co-operative Wholesale Society, through 1051W its branches in Lancashire and Yorkshire, whilst immune from taxation under Schedule D, is supplying flour for sizing purposes to trading concerns outside the co-operative movement in competition with firms which are taxed under that Schedule; and if he will take the necessary steps, by making the tax general, to put an end to competition which is bearing heavily on traders in these counties?
§ Sir W. JOYNSON-HICKSA cooperative society registered under the Industrial and Provident Societies Act, 1893, is entitled under the provisions of Section 39 (4) of the Income Tax Act, 1918, to exemption from Income Tax under Schedules C and D, unless it sells to persons who are not members and the number of its shares is limited by its rules or practice. I would, however, remind my hon. and gallant Friend that co-operative societies do not enjoy any general exemption from Income Tax. As is evidenced by the Report of the Royal Commission on the Income Tax (Cmd. 615), the tax paid by the societies and their members under the legal provisions which govern their case does not greatly differ from that which would be payable under the ordinary Income Tax law. The matter to which my hon. and gallant Friend refers does not, in my judgment, afford any sufficient ground for altering the existing law.