ABSTRACT
The main controversy at the present time in relation to the taxation of co-operative societies centres round whether or not the sums placed to reserve by these societies should be subject to Income Tax. The Committee recommended that moneys placed to reserve by co-operative societies should be taxed at the standard rate of Income Tax: and legislation was introduced into Parliament by the Chancellor of the Exchequer, Neville Chamberlain, and giving effect to this recommendation. The contention was accepted as valid by the Departmental Committee on Income Tax; but the Royal Commission on Income Tax of 1920 rejected the notion, so far as the portion of the "surplus" placed to reserve was concerned—this part of the "surplus", the Commission held, was profit. The British or any other Income Tax ought to be levied on a person's income; and for the sake of clearness we may add, on the real income in terms of goods and services which he receives.
