Jan. 18. recent issue of the ''Economist'' contains a very clear statement of the scope of the excess profits tax foreshadowed in the Budget resolutions and given definite form by the Finance Bill. At first sight, perhaps, the sub-is of no more than indirect interest to Britons in Shanghai because the trades and hi 8808 liable to the tax include only those carried on in the United Kingdom, or owned or carried on in riy other place by persons ordinarily resident in the United Kingdom. What the Government is asking of Britons at Home, however, should be an index to what Britons in the East should do in support of the war, and in view of a suggestion which we propose presently to make it may be helj ful to outline the character of the new tax. Broadly speaking it is an additional income-tax calculated by income-tax rules over periods terminating after August 4, 1914, and before July 1, 1915, the intention being to tax profits earned in periods ending later by subsequent legislation on the same lines. Any business or trade to which the tax applies is liable to pay to the Exchequer equal to fifty per cent. of the amount by which the profits for the period in question exceeded by more than £200 pre-war standards of profits. Farmers, officials, employees and professional men are exempt, but any business man or agent who is paid partly by commission is included, except commercial travellers who are excluded. All salaried persons are excluded, whether their salaries have been stationary or not: clerks working over time or persons who have changed one salaried occupation for another with higher remuneration also escape. The position of marine underwrite ers is uncertain because the capital required hardly fulfils the requirement of capital expenditure, while the profession is to s large extent dependent upon personal qualifications. With these exceptions, the tax applies to all persons carrying on business.
Text read from the printed page and cleaned; old type leaves the occasional error.