THE INCOME TAX.

Auckland Star, Volume LI, Issue 227, 22 September 1920, Page 4

THE INCOME TAX.

I At the moment that the Conference of ' Chambers of Commerce in Wellington was considering the Land and Income Tax Amendment Bill, and resolving to ask the Government to postpone the Bill and refer the whole question to a Royal Commission, the Prime Minister was proposing to take the Becond reading this week, but to put off the committee stage for another week, "so that the people concerned would have an opportunity of ventilating their grievances." But the main point made by those who are pressing for delay and investigation is that "the people concerned" arc entitled to much more consideration than a postponement of one week. The issues involved by the Bill are so important and so intricate that a week would be quite inadequate for the full presentation of objections, to Bay nothing of the weighing of them when they had been .presented. The truth is that the Bill is in a sense a leap in the dark; or, to put it another way, it is a series of proposals, some vaguely framed or of uncertain application, the individual and total effect of which can be known only to the officers of the Department. The Bill was no doubt framed by the Department to meet certain financial requirements, ; and the main consideration would be to raise the money as easily as possibleIt would be unjust to a capable Department to say that the complex interests of the taxpayer were ignored, but it is a fact that the taxpayer bad no say in the framing of the Hill. No adequate explanation was issued with the Bill; there was not even a tabic of figures to show how the new rates compared with the old. No attempt was made to indicate how the new proposals would operate in the different classes of income, or to estimate what they would produce. Mr. Massey said it was not intended to raise more money, but it must be remembered that the tendency is generally to obtain more money from these form's of direct taxation than is estimated. For example, the Minister's estimate of lahd and income tax for 1918-1!) was £6,050,000, but he obtained £7,700.000. For 1919-20 he budgeted for £7,360,000, and obtained £7,026,000. Who can be sure that this new Bill will not add half a million or a million to the total!

The points in doubt may be cleared up when Mr. Massey speaks on the second reading debate, or in die committee stage. Tiicre is, for example, the doobt about the proposed tax on interest on New Zealand loans held by residents abroad—the extent to which it applies, and whether it ie a breach of faith. We have seen no official statement thut allays apprehensions on this score. But explain as it may, the Government cannot get over the fact that this is a Bill affecting many thousands of people that has been framed without consultation with those concerned. It deals, too, with one of the most difficult and intricate of financial questions, on which the opinion of the business man and the student of economies is. valuable. IN. provision has been made by the Government for taking these opinions, although a Royal Commission was suggested to it by the business world months ago. The Chambers of fommerce have done well'to 1 frame a collective opinion on the matter. They are the bodies who should speak for the business world, and they have approached the subject in the right spirit. We hope the Government will listen to the Conference's weighty recommendations, and refrain from ruehing this 'hastily framed and imperfectly understood measure through Parliament. If it is not possible to postpone the Bill till next year, then at least it might be put off to the very end of the session. and in the meantime a representative body appointed to inquire into the whole problem. 'But we should like to see a longer and more leisurely investigation. For example, the one question of transferring taxation from the company to the shareholder, which is perhaps the most important of all those involved, would probably necessitate more investigation than could be given to it \o the limited time available now. The British Government found it desirable to get the advice of an investigating committee on the subject of income tax, and we hope a similar course may be possible here.