LAND AND INCOME REVENUE.

Auckland Star, Volume XLVII, Issue 155, 30 June 1916, Page 7

LAND AND INCOME REVENUE.

THE MORTGAGE TAX. ITS PROBABLE REINSTATEMENT. COMMITTEE DISCUSSION. ""*"" 1.-; (Br Telegraph.—Parliamentary Reporter.) j WELLINGTON, Thursday. Owing to the difficulty which cropped I up unexpectedly in connection with the I proposal to do away with the mortgage H tax, there is hardly any likelihood of j| this tax disappearing. The Minister of I Finance explained to the House to-day, I when the Land and Income Tax Bill was 1 committed, that it would result in a net § Joss of £174,000. Unless the House could | 6Uggest another way of raising this sum, I he was afraid he could not do without § the mortgage tax. The substitution inI tended for the mortgage tax was aseessI ment upon incomes derived from mortI . gages, but, in giving effect to this propoj sal the bill dropped the right to deduction j of the amount of mortgage from the J land tax assessment. It seemed impossible to give relief to mortgagees from payment of mortgage tax andlillow the position to remain open without causing great loss of revenue. He proposed to reinstate the right to deduct mortgages j from land tax assessment. He would like to have seen the last of the mortgage tax, but the revenue thus sacrificed I must he made up. Mr Wilford: What is it worth? Sir Joseph Ward replied that the loss I by repealing the mortgage tax would be £344,000. Against this could be put a gain in income tax of £170,000. causing a net loss of £174,000. ° Mr Hindmarsh said he could not congratulate the Minister on tlie drafting of the bilL Surely the House would not withdraw a tax because it could be passed on. OPINIONS AND EXPLANATIONS. In the course of discussion on the short title of the bill, Mr Anderson expressed the opinion that the mortgage tax waa simply an additional land tax. The mortgagee should pay his share, and exemptions should be made in favour of those with very small incomes. Mr Buddo thought that the imposition of the mortgage tax was accompanied by too many anomalies to be satisfactory. There ought, in his opinion, to be 6omc other method of getting the £170,000 revenue required. Sir Joseph Ward said that if the mortgage tax were Temoved and the old system of deduction of all mortgages from the value of land for income tax assessment purposes were reinstated, then anybody who chose to have a mortgage effected on his land could cheat the Department out of what was in reality land tax. If they abolished the mortgage tax and agreed to have no deduction from the amount of mortgage from the land tax, they would have to make up a deficiency of £344,000. If, however they repealed the old law entirely, and obtained in addition the amount which would accrue under the new proposals, an increase amounting to £30,000 would be obtained. It would be impracticable to have the two systems running side ,- v i ll de .'.-!° there was nothing,else to do ' but-fo con&tW B tue 'mortgage'tax' Mr. Wilford protested that the committee was in the same position of bewilderment about the bill as the.House was when ifie second reading was forced through Practically twenty clauses had -been withdrawn from the hill, and the ■ committee had no idea in what form these clauses would reappear. One of the blots in the bill was the drawing of no distinction between earned and "unearned income. Mr. Vcitch declared that landowners generally were let down far too lightly. He. for one, was prepared to vote for a considerable increase in that method of taxation. The short title was passed at 10.40 p.m. When Part in., dealing with assessment, was reached, Mr. Wilford remarked that, as no member could move to increase taxation, they were impotent. He suggested, therefore, that the best thing to do was to let the whole thing pass through without comment. EXEMPTION OF MINING COMPANIES. A sub-clause exempting gold mining companies from paying taxation was amended by the Minister to include companies mining scheelite. Mr. Wright asked if the Government would not lose a great deal of money by this exemption of gold mining companies. Sir Joseph Ward replied that they could not lose more than £10,000, according to the estimates. The reason for exemption was to encourage mining. Only about three companies, he understood, were paying dividends. Mr. Payne argued that if only three companies were paying dividends, it Would not hurt them to pay taxation. Mr. Webb suggested that it would be better assistance to small companies if taxation for dividend-paying ones were devoted to giving them financial aid. Mr. Payne demanded a division on the proposal to exempt gold mining companies, but the proposal was carried by 40 to 6. Mr. Payne next moved to mutilate the sub-clause by omitting the word "mining," contending that wealthy companies, iike the Waihi G.M. Co., should, in equity, pay taxation. Mr. Statham expressed the opinion that if some relief were not given to gold mining companies in the direction proposed in the bill, many of them, owing to increased expenses, would have to close operations altogether. Mr. Webb contended it was not the struggling companies which would be ' assisted by this exemption, but wealthy dividend-paying companies. The amendment was lost by 35 to 10. All the remaining clauses were agreed to, and progress was reported.