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Serious Effect on Exports of New Taxes

16th June 1950, Page 30
16th June 1950
Page 30
Page 30, 16th June 1950 — Serious Effect on Exports of New Taxes
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Which of the following most accurately describes the problem?

• DROTESTS against the imposition by PRO Government of the additional tax on petrol, and purchase tax on commercial vehicles. are contained in a statement issued by the Society af Motor Manufacturers and Traders.

• Already, increases in road transport rates, by as much as 10 per cent, in some instances, had resulted because of the higher cost of fuel.

The new purchase tax has struck a severe blow at a number of the larger and higher-priced special-type vehicles. and makers were particularly concerned about the future of their order books. As an instance, in one case the purchase tax would increase the price of the machine by £2.435.

As the S.M.M.T. points out, the commercial vehicle industry is the largest • exporter of lorries and buses in the A28 world, and if the industry is to meet increasing competition in overseas markets the reduction of costs must be a primary aim.

The new taxes are destined to have the very reverse effect at a vital moment in the economic history of the country.

A memorandum, of which copies have been sent to the Chancellor of the Exchequer and all Members of Parliament, has been prepared by the British Road Federation. Of the tax on fuel, the Federation points out that this is now is. 6d. a gallon, or almost 100 per cent. It is contended that there can be no possible justification for including motor fuel in the category of semiluxury articles which carry this amount of tax.

Unlike the taxing of a commodity which affects only those who buy it, taxes on industrial transport affect not only those who operate vehicles, but the owners and buyers of the goods carried.

The singling-out . of commercial vehicles for the imposition of purchase tax is, says the Federation, a discrimination against road transport. As essential equipment of trade and industry, there was no justification for such a tax.

The -Chancellor of the Exchequer estimated that the increased cost to road passenger services would be from 4 to 5 per cent. There are indications, however, that there may be applications for a fares increase of 7 1/7 per cent. In the case of goods transport rates, says the Federation, these have already been increased by 71 to 10 per cent.

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