OIL CHAIRMAN ON E.P.T.
It is good to see a company chairman taking up the cudgels on behalf of an improved Excess Profits Tax. A docile House of Commons acquiesced in the Chancellor of the Exchequer's proposals, but that does not rule out the possi- bility of getting some very necessary amendments next April. Meantime, Mr. Kenneth Moore, chairman of Trinidad Petroleum Development Company, has given the City a useful lead. Taking this particular company, which has been
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FINANCE AND INVESTMENT
(Continued from page 6o2) carrying out an energetic programme of development in recent years, he showed the genuine hardship inflicted by the choice of the years 1935, 1936 and 1937, as the pre-war standard. In that period the company's output and profits were low, with the inevitable result that a very large slice of the much-increased earnings now being reaped from previous development work will be absorbed in E.P.T. Again, as the company may be required, in the national interest, to extend its drilling programme, the position may arise in which reserves of oil are being exhausted, while the profits will be largely taken by the Exchequer. Mr. Moore emphasised the following points : (i) The choice of the pre-war standard years, 1935, 1936 and 1937, is purely arbitrary. Why not include 1938 and the first half of 1939? (2) contrary to general impression there is no alternative percentage on capital standard except for the companies which were less than 33 months old last April; (3) the tax is imposed in a much cruder and harsher form than the old E.P.D.; (4) there is absolutely no provision to meet the case of businesses in the development stage, in process of resus- citation or in a prolonged depression in the standard years ; and (5) that the right of appeal to the Board of Referees in the case of hardship is largely illusory. Here the appellant must satisfy the Board that the rate of profit or volume of business was less in the standard period than might then have been reasonably expected, an unenviable task. I hope the City will buckle to and organise a movement for reform. Nobody denies the Chancellor's need of money, but there are good ways and bad ways of raising it.
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