MUTUAL LIFE COMPANIES.

Auckland Star, Volume XLVIII, Issue 208, 31 August 1917, Page 6

MUTUAL LIFE COMPANIES.

HEAVY TAXATION CALL. ißt Telesranb.—Parliamentary Reporter.! WELUXGTOX. Thursday. It wa* suggested by .sir Joßn i'in'ilay, in discussing the Finance Bill to-night, that the method imposing income tax on t!ie whole income from the m-ve-tmeTit<i of four Mutual Insurance Companies operating in New Zealam; would cause a heavy liability, whieii may encroach on tiU'ir reserves. >«o matter how serious might be the loss from high mortality, the taxes would operate though tne reserve fund might be swept away. The taxation system imposed on the Government Life Insurance Department, which was treated as a limited liability company, operated less severely, as he showed by contrast between tlie (Jovernment Department and the A..M.1. Society: the interest received by the latter tociety from New Zealand invest- ! ments was .i.":>:><U>oo. while the income from a similar source of the Government Insurnni'e Department vw £2.">tJ.----000. The difTerem-f in inrome was t+:.----000. but the A.M.P. Society in HUG pai.l tW.OSI income tax. while'the State Department paid ill.!>+H. thoiiffli undei j tlie system applied to the A.M.1 , , it Iwouli have paid £ 3Ii.!MW. The war j taxe.- imposed this year i.n the A.M.I. j nrntllil lie £ 102.t502. nearly four ani a-hnlf times :is much as upon tiie Coy- '■ ernment Insurance U.-partment. The i danger of tafcinp the »lu>|p of the income trom Mutual Ineuranco Sncietieyj ! inve-tmente was that it might make the j institution insolvent by trenching on J reserve-, which were < rente. 1 to make v ■ actually sound and able to meet prospee--1 tive liabilities. Tiie only part ot these in--1 stitutions" im-ome- which should lie taxed i was the surplus over valuation requjreI ments to meet death claim?. 'I'heir ;=pecial position was reooenised in uns:----i land and in Australian States by partial exemptions from taxation.