Post-War Income Tax on Industry

Part of the debate – in the House of Commons on 25th April 1944.

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Two main propositions have been advanced by industry. The first is one to which I do not feel able to accede. It is that there should be a reduction of Income Tax in respect of any industrial profits that are not distributed but are placed to reserve for the future development and extension of the business. This, in effect, would be giving relief for the act of saving, and that is not, in my judgment, the appropriate approach to this problem. The other proposition advanced by industry is that taxable profits should be real profits in the sense that those profits should be struck only after making all proper deductions and allowances, especially adequate allowances such as might be made on a commercial basis for the amortisation of money expended on assets which are used up in the making of profits.