THE FINANCE BILL.

Auckland Star, Volume XLVII, Issue 172, 20 July 1916, Page 6

THE FINANCE BILL.

excess PBorm tax. —— # VERY MANY ANOMALIES. ACCOUNTANTS' PISCOSSION. An addrese on the subject of the Finance Bill was delivered last night to a meeting of members of the Auckland branchfof the New Zealand Society of Accountants by Mr. W. H. Hemingway., who was one of the accountants' deputation that recently waited on Sr Joseph Ward at Wellington in regard to ttie measure. A number of leading commercial men were present by invitation, and the total attendance at the meeting was about fifty. Mr Hemingway commenced By outlining the provisions of the »W I*»d and Income Tax Bill, which, he eaid, wae an entirely new measure, eonsoEriating the four earlier Acts. It contained 169 sections, 14 or 15 of which contained qnite new provisions. The most import ß,l * change in the law was the abolition of the mortgage tax, the interest on mortgages being now taxable as income. Passing on to the Finance Act, the epeaker gave a detailed account of the provisions which, he said, were of the greatest importance to the business community, and especially to public accountants, namely, the rules governing the excess profit tax. There had been no attempt on the part of the Government, he eaid, to distinguish war pro&ts ifrom other profits; in fact, Sir Joseph Ward had told the deputation that to do so was an impossibility. The Government simply sought to lay hold of 45 per cent of all profits made in excess of the "standard income" prior to the war. He went on to explain the four waye in which the "standard income might be reckoned by the taxpayer —on a basis of 7J per cent of hie capital, or on his average income for three yeare, two years, or one year prior to the war. There were

many difficulties and anomalies, he added, particularly in regard to (a) new businesses with profits not attributable to the war; (b) small businesses in course of development, showing a normal and essential increase; (c) reorganised businesses showing an increased income through better methods; (d) businesses that had expanded entirely through their Gwn efforts since the war;.and (c) large businesses earning big profits both before and after the war, but showing no increase. These anomalies arose from the fact that the "normal income" wag not a real and effective guide in every case. They would have to be dealt with by the ne-w Appeal Board, under the discretionary powers given it. The bill, concluded Mr. Hemingway, was plainly a makeshift measure, intended to meet very extraordinary circumstances, and as an example of "scientific" taxation it was calculated to give any economic authority some cause for amusement. Sir Joseph Ward had put matters bluntly to the deputation when he said that the Government wanted £3,000,000, and was determined to get it. He also pointed out tint the tax would produce only £3 a head of the population—a small matter. The meeting di6cussed some of the minor points of the bill, pointing out several anomalies that the lecturer had not mentioned. A hearty vote of thank* waa passed to Mr. Henringway for his address. • ■ ■. < ■

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