INCOME TAX

Ashburton Guardian, Volume 66, Issue 46, 4 December 1945, Page 2

INCOME TAX

AMENDING BILL PASSED FUTURE TAXATION IN LATER MEASURE (P.A.) WELLINGTON, Dec. 3. Provisions concerning future taxation were not in the Land and Income Tax Axmendment Bill, so the House must wait for a later Bill, said the Minister of Finance (the Hon. W. Nash), replying io the second reading debate on the Bill in the House of Representatives this evening. The Opposition took advantage of discussion on the Kill, which was passed, to urge a reduction of taxation. Although Avith the introduction of the universal family benefit income tax exemptions for children would generally cease, the exemption of £SO could still be claimed for any child for whom the family benefit was not payable, said Mr Nash, speaking to the second reading of the Bill. The Leader of the Opposition (Mr S. G. Holland) asked whether in such cases the exemption could be claimed as of right. Mr Nash replied that it would have to be established that the child was dependent. There were some children 17 to 18 years old to-day earning £6 or £7 a week. However, the commissioner had power to treat any child for whom a benefit was not being paid as a dependent child. That was actually an extension of the existing laAv, which allowed exemption only for children up to 18 years. The amendment would mean that a child even of 21 or 22 could be classified as dependent if he or she was not earning an income, and that provision was better than anything hitherto.

Mr Nash said the commissioner would have similar power concerning relatives for whom a taxpayer claimed exemption. The, commissioner would determine whether the relative was in any way dependent. If the relative had sufficient income of his or her own, no deduction would be made from the taxpayer’s income for that relative. “Fantastic” Taxation Rates Mr W. J. Poison (Opposition, Stratford) said the Minister had referred, earlier to the Bill as one that would provide relief for those entitled to it within the national interest. Actually, apart from patching over one or two sores, and making small adjustments which were just and reasonable, and long overdue, the Bill did not deal with any of the important matters affecting the battered, long suffering taxpayers of New Zealand who were paying the most fantastic rates of taxation of any country in the Avorld. We were uoav entering an era of peace, in which it Avas incumbent upon us to get down to a basis enabling us to compete with the rest of the world, instead of remaining in a fool’s paradise on the artificial basis to which we had become accustomed in the last few years. Yet the Minister of Finance offered no hope of relief. He took up the self-satisfied attitude of a wizard of finance who knew more about how to spend other people’s money than they themselves. He believed he was right, and was depriving the people of the opportunity to carry on their businesses as they might do in the country’s interests. It was an absurd idea that the Minister of Finance knew better than the taxpayers how their businesses should be run. The Bill offered taxpayers no relief. War Liabilities

Mr J. Thorn (Government, Thames) said liabilities arising from the war would. have to be met, and therefore taxation would have to remain. Although company taxation had progressively increased since 1935, so had the residue left to companies. He said that in 1935 income remaining to companies after taxation had been paid was £9,113,000, and in 1944 the figure was £14,800,000. Those figures could not be said to indicate a policy ruinous or calamitous to industry. The Government had been twitted about not reducing taxation because the United Kingdom Government was doing so. The fact was that the United Kingdom was “going slow" in making any reductions because of the inflationary effect sudden widespread reductions would have. The Hon. A. Hamilton (Opposition, Wallace), and Mr G. H. Mackley (Opposition, Masterton) also spoke. Mr Nash, replying to the debate, said the special depreciation allowance of 10 per cent, on buildings and plant was not for a calendar year, but from the time in the first year when the farm came into use. The Bill was put through the Committee stages and passed.