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APPENDIX IV.PRECISE OF EVIDENCE PRESENTED BY MR. F. C. HASSELL, SUPERINTENDING INSPECTOR OF CUSTOMS AND EXCISE.The preferential duties on tobacco were introduced by the Finance Act, 1919, and took effect from the 1st September of that year. Previous to that date the standard rates of duty on unmanufactured tobacco were:—
These rates were reduced by one-sixth for Empire—i.e., colonial and home-grown tobacco, and became respectively, for such tobaccos:—
The Finance Act, 1924, abolished, as from the 26th April, 1924, the preferential rate of Customs duty on unmanufactured tobacco, and since that date the standard rates of duty on unmanufactured tobaccos have been:—
thus affording a preference of 1s. 6d. per lb. on home-grown tobacco. Tables are annexed showing (Table I.) the number of growers, acreage planted and quantity of home-grown tobacco produced respectively for the years 1921 onwards, and (Table II.) the quantities of tobacco, manufactured and unmanufactured, cleared on payment of duty from the 1st April, 1923, onwards, distinguishing between home-grown and foreign tobacco, and, as regards the latter, between preference and non-preference tobacco, so far as these terms are applicable. As regards Table I., it will be observed—(1) that there has been a steady decline in the quantity of home-grown tobacco produced in the years from 1921 onwards; (2) that the tobacco sent to the rehandler for curing shows a steady increase in the percentage found unfit for packing, indicating a want of care or skill on the part of the growers, and (3) that the average yield per acre has decreased from 937 lbs. in 1921 to 411 lbs. in 1924. Climatic conditions, however, were exceptionally favourable to the growth of tobacco in 1921 and exceptionally unfavourable in 1924. The average normal yield is from 700 to 800 lbs. per acre. As regards Table II., it will be observed that the abolition of the preference on colonial tobacco in 1924 did not result in an increase in the quantity of home-grown tobacco cleared for consumption in that financial year. There was, on the contrary, a decrease as compared with the previous year of 31 per cent. in the consumption of home-grown tobacco. There is, however, a recovery in the current financial year which, if maintained, will bring the total for the year slightly beyond the 1924 figure. If it is assumed that home-grown tobacco displaces an equal quantity of foreign tobacco, the cost to the revenue of the existing preferential rate on home-grown tobacco on each acre of tobacco grown, taking the yield as 800 lbs. per acre, and allowing 10 per cent. for waste (stalks, etc.) surrendered to the revenue by the manufacturers and on which duty is repaid, would be 800—80×1s. 6d.=£54. If the preferential rate were increased from five-sixths of the full duty to three-fourths as in Great Britain, or 2/- per lb., the cost per acre on the same figures would be £72. Taking the actual consumption less repayments in the financial years 1924-25 and 1925-26, so far as the figures for the latter are available, the cost to the revenue of the preference on home-grown tobacco has been £1,189 4s. 0d. and £1,451 14s. 0d. respectively. On a preferential rate of three-fourths of the full duty these figures would have been £1,585 12s. and £1,935 12s. respectively. If, however, an increase in the preferential rate had the effect of increasing the consumption of home-grown tobacco up to the limit of the capacity of the existing curing plant, which is understood to be capable of dealing with the produce of 140 acres, or say (140 × 800) 112,000 lbs., the cost to the revenue would be £10,080 per annum. While it is unlikely that production, under the circumstances supposed, would reach that figure for some time to come, the stock of home-grown tobacco in bond, which amounted to 142,820 lbs., on the 31st December last, would be available for immediate use and would permit of the level of consumption being raised at once to the figure mentioned above. HOME-GROWN TOBACCO.TABLE I.
TOBACCO, MANUFACTURED AND UNMANUFACTURED, CLEARED ON PAYMENT OF DUTY. FROM 1st APRIL, 1923 to 31st OCTOBER, 1925.TABLE II.
(*) Figures not available in respect of two other growers, who were authorised to grow 1½ acres. (†) Three growers authorised to grow a few square yards each, not included. (‡) Authorised acreage given. Actual acreage probably considerably less. The yield per acre varied from the figures given in column (7) down to nil except in 1923 when the lowest yield was 313 lbs. per acre. |
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