The Film Renter and Moving Picture News (Apr-Jun 1922)

16 THE FILM RENTER & MOVING PICTURE NEWS. (Continued from previous page). would be that unemployment would’ be decreased and additional people would be employed in these new and large buildings as they were erected if only the industry had the encouragement of a readjustment of the scale of tax. THE BURDEN OF TAXATION. We have got 1s. off the income tax and a promise of something more to come next year. If we could get a reduction of the Entertainments Duty on the lower scale we could go ahead with some confidence. We cannot get the money for all these purposes unless the industry is prosperous, ‘The burden of this duty is more than the industry can bear to-day. The industry pays income tax, corporation profits tax, and a duty on films. There is an import duty on films and carbons, but the Entertainments Duty is a tax on the box office receipts which has no regard or relation whatever to our profit, or our ability to pay, with the result that there are hundreds of kinenin theatres in the country to-day making a profit at the box office, but when the Entertainments Duty is deducted they are incurring a serious loss. HOW THE TAX OPERATES. The right hon. gentleman the member for Gorbals (Mr. G. Barnes) says the industry does not pay the Entertainment Duty, because he says the public pay it. Ido not know what he means by that. If [ have a theatre holding 1,000 people, and I can fill it 14 times a week at 6d. per head, and make a reasonable profit, what I have to do to-day is to charge the public 6d., out of which I get 44d., and the Exchequer gets the 14d., but if I wish to make it pay I must put another 2d. on the duty and charge &d., which the public will not pay. The right hon. member for Gorbals says that the public pay the duty, but lony ago the public, owing to industrial depression, lower waxes, and unemployment, have passed this duty on to us by transferring themselves from the 1s. seats to the 6d. seats, and to the lower-priced seats, and the duty is now more than the industry can possibly pay. WHAT IS A MAN TO DOU? What is a man to do who owns a kinema making £2,000 a year after the present tax is deducted? He has to deduct £4,000 for the rent, making a loss of £2,000. Naturally, he says: ‘I cannot go on. I can run it at a profit if I am allowed to. I am willing to pay the taxes which other people pay. but I eannot charge higher prices because the public cannot pay them, although I can make a reasonable profit. But the deduction of the Entertainments Duty produces a serious loss, and I must shut up. IT have to pay under a 50 years’ lease £4,000 a year, and therefore if I shut up my kinema my loss will be £4,000. Therefore, I am between the devil and the deep sea, whichever way I go. I want to make a smaller and a reasonable profit, but [ cannot do it.’’ That is the effect of the tax, not on cone, but on hundreds of kinema theatres in this country, and at the right time I shall provide the Committee with ample and indisputable evidence on this point, as I have already provided the Chancellor of the Hxchequer with such evidence. A CONCESSION THAT WILL COST NOTHING. In the Committee stage I shall put down amendments which will remedy this, and which I am eonvinced will cost the Chancellor of the Exchequer nothing if he takes a long enough view. The increased prosperity of the industry and the inercased number of those places paying the duty, perhaps not this year, but next vear and the following years, will considerably increase rather than decrease, the revenue which the right hon, gentleman is deriving from this source. I pointed out last year that the » Google May 6, 1922. revenue from this source would decrease. As a matter of fact, it has fallen £1,500,000 during the year. It is falling at a more rapid rate to-day, but the fall is no real criterion of the effect of the duty on this industry. A CONCRETE EXAMPLE. I can tell the Committee why this is so in a very few words. The proprietor of a kinema, built before the war and probably costing about £60,000, finds he is running it at a substantial loss owing to the duty. He carries on for a time, but the moment urrives when he cannot go on with it any longer. All this time the Chancellor of the Exchequer by this duty is taking from him hundreds of pounds per week, and eventually this drives the man into bankruptcy. Finally, the man goes into liquidation, and the kinema changes hands, say, at £20,000. Another man buys that kinema, and carries on at the lower capitalisation. He carries on. He continues to pay the Chan. cellor of the Exchequer his revenue. But the time comes when he can no longer carry on. He cannot make a profit even on the lower capital, and he goes into liquidation. Then someone else comes along, and buys the place for £10,000. Instead of getting £200 the Chancellor of the Exchequer gets perhaps only £190, but he docs not really feel the result of his tax on the industry as long as the place keeps open. So lone as it does that he continues to draw revenue, but he has behind him a long tale of bankruptcy and disaster, It is quite time he gave attention to these facts, and examined the fizures of the situation, and gave relief by a readjustment of the scales on the Jower-priced seats, to make them = conform with the scales onthe higher-priced seats, thus giving confidence to the industry and enabling it to develop. ' ’ HOW THE TAX HITS THE POOR. Before I conclude, I should like to point out to the right hon, gentleman that the duty on the lower-priced seats ringes from 25 per cent. to 33} per cent., and 40 per cent. These are seats occupied by the working classes. Tbe tax on the seats occupied by people who go to West End theatres in London and in the great provincial cities varies from 11} to 16 per cent. Thus, here again the working classse are taxed on their amusements to an extent more thun double the charge on the wealthy classes, Iam asking the Chancellor of the Exchequer to-day either to readjust the scale of taxation and to bring the lower-priced seats on the same percentage of taxation as the higher-priced ones, or, what would be fair and just, and would be welcomed by proprietors, to adjust the prices to meet. the altered circumstances and to impose a flat rate for all seats. If the right hon, gentleman had a flat rate of 15 per cent. on the box office receipts he would be slightly increasing the charges on the expensive seats and decreasing those on the cheaper seats. The tax falls directly on the proprietor of the entertainment. Tt has done for two years or more now, A FLAT-RATE TAX. The great majority of proprietors would weleome a flat rate of 14 per cent. rather than this impossible charge on scheduled prices, which does not enable them to charge the prices they desire, If a proprietor raises the price of a seat by Id. he also raises the price of the tux. If he lowers the price of a seat by a Id. he lowers the price of the tax by only half the amount: Ly which he lowers the price of the seat, and every time, whether he be raising or lowering prices, the proprietor suffers twice as much as the Exchequer, 7 therefore propose a flat-rate tax which would give absolute freedom in adjusting prices, and would also give confidence for the development. of the industry, while, ultimately, it} would increase the revenue which the right hon. gentelman is now raising from thig seurce,