TAXATION PROPOSALS

Ashburton Guardian, Volume XLVI, Issue 10457, 25 July 1925, Page 6

TAXATION PROPOSALS

REDUCTION ON INCOMES. MATTER UNDER CONSIDERATION WELLINGTON, July 24.

Tho question of taxation and its equitable distribution has engaged the attention of the Government with a view, to further relieving industry of the burdens imposed on at by the high taxation of war years, states the Budget. While allotting a portion of our surplus to concessions in pensions and in other-, directions, further adjustments in the rates are- desirable if individual initiative and energy in developing our' resources and output are to be encouraged. Moreover, the investment of capital outside the Dominion is induced by high taxation. Taxation, which might have the appearance of falling direct on the person or concern taxed, does not wholly do so, but is largely borne by the consumer, and as. a consequence we have a high-price level and increased cost of. living. Reductions in taxation also assist in diverting capital investments from tax-free securities into trade and development purposes. The Government has now under consideration the adoption of a new in-come-tax schedule following the lines discussed by the Taxation Commission. The proposed schedule would reduce the maximum rate to four and sixpence from the present rate of 4s 10 2-3 d in the £, and the minimum rates from 8d to 7d in the £, while between these rates all incomes would receive concessions. ' The present schedule, which still stands in the Act at rates up to the maximum of 7s 4d in the £, and has been subject to percentage reductions from time to time would be dene away with by the adoption of straight-out rates. "I have referred to the desirability of encouraging loans on mortgages, particularly to aid farmers," said the Minister. "Investment on mortgage in recent years has suffered in eonip::risen with investment in stocks, debentures, etc.; but the indications' are that the mortgage is becoming again more sought after, and a trend in that direction is, moreover, noted in Australia within the last few months. The in-come-tax reductions which the Government is now considering should facilitate investment on mortgage by reducing tlie rate of income-tax down to a parity with debenture-tax; and, as indicated, it is proposed to repeal the mortgage duty of 5s per cent. "The net receipts for the past year amounted to £4,721,303 —land-tax, I £1,335,251 ; income-tax, £3,386,052 i and compared with the collection for the I previous year .showed a decrease of J£456,691. The land-tax receipts compared with 'those of 1923-4 show a decrease of j £91,211, the total last year being I £1,426,462 as against £1,335,251 in .924-5. This decrease represents portion of the reduced revenue anticipated .s a result of the reduction of 5 per

ent. provided for by the Land and ■ income Tax (Annual) Act. 1924, and ,he increased mortgage exemption alowed by the Land and Income Tax Amendment Act, 1924. The balance of .he .remission was, however, offset by •ile increased value of land in districts revised under the provisions of the Valuation of Land Act and the collection of a considerable amount of arrears of tax. ''The income-tax receipts compared with those of 1923-24 show a decrease of £395,480. In 1923-24 the total was £3,781,532 and last year £3,386,052. "The decrease in the income-tax is due to the increase in the percentage reduction from 20 per cent, to 33 1-3 per cent, provided by the Land and Income Tax (Annual) Act, 1924, a compensating influence being an increase m the income of taxpayers generally.