TAX PROPOSALS.

Auckland Star, Volume LXI, Issue 174, 25 July 1930, Page 8

TAX PROPOSALS.

"TO BRIDGE THE GAP." INCOMES, 10 PER CENT EXTRA r MANY STAMP DUTIES r RAISED. '■ TOTALISATOR DUTY DOUBLED. (By Telegraph.—Parliamentary Reporter.) WELLLXGTOX, Thursday. '•'The small surplus for last year "was only attained by close control over the expenditure, and there was very little margin to come and go on," said the Prime Minister and Minister of Finance, the Hon. G. W. Forbes, in the course of his Budget announcements in the House of Representatives to-night. "Thus, when" we fbad. ourselves faced ' this year with a shrinkage of £2,830,000 in revenue and added liabilities on rigid items of over £400,000, there is no j possibility of Bridging the gap without some additional taxation." The Customs tariff resolutions already passed would, it was estimated, produce about half' the additional revenue required, and. the bulk of/that extra revenue would come from Jihe increase in the duty on foreign goods. Mr. Forbes then proceeded to give in detail his proposals for raising the revenue still required. His remarks on the film tax and. the adjustments of the land tax are reported under headings. Life Insurance tympanies. "It is also proposed," Mr. Forbes went on, "to make some changes in regard to the taxation of life insurance companies, the taxation on which has been considerably reduced in recent years. In 1921 it was provided that the income should be assessed at half the ordinary rate, and the companies have been able to increase greatly the bonuses paid. > It is found, however, that the Government Life Insurance Department, the assessable income of which is determined by its actual profits, is paying 32 per cent of the total income tax paid by life insurance companies, while its income represents, less than 22 per cent of the total income of life insurance companies. This is the result of the peculiar method of arriving at the assessable, income of foreign life insurance companies. Such companies are assessed on income derived from investments in New Zealand and investments out of New Zealand held by or on behalf of the New Zealand branch. It is not necessary for companies to jnake investments on behalf of any particular branch, consequently they may to a large extent determine their own taxation. It is proposed, therefore, to provide that in the case of foreign life insurance companies tl<#. taxable income from life insurance business shall equal 25 per cent of the premium income and consideration received for annuities. This is approximately the rate shown on an actuarial basis by the Government Life Insurance Department. "It Is proposed to increase the income tax rates by 10 per cent. Increases in Stamp Duties. "Under the Stamp Duties Act it 5s to make the following alterations:-— . "(a) Increase the banknote duty from the present rate of 15/ to 22/6 per cent en the average amount of notes circulating during each quarter. This increase, ■which will operate as from July 1, means an increase from 3 per cent to H per cent in the banknote duty. *(b) Increase the totalisator duty from 2} per cent to 5 per cent, the State. to receive the whole of the increase. At present the State receives 2£ per cent the racing clubs 7$ per cent of the amount deducted by racing clubs from investments on the totalisator. The proposal is to double the revenue received i>y the State without interfering with received by the clubs. "(c) Require insurance companies to ftay the usual 2d duty on receipts. At present they enjoy an exemption from $Mstai. «(d) Indrease by 10 per cent the stamp fluty on all instruments presented for etamping. Instruments which the pariiee thereto are permitted or required to affix »dheeive etamps or write on itwnped paper; will not, however, be !***«£ ■•'■-"■

"(e) Companies' annual license duty: Minimum to be £1 and maximum to be increased from £200 to £300. "(f) The exemption from conveyance duty of transfers of land from the Crown to be limited to lands within, the meaning of the Land Act, 1924. or Land for Settlement Act, 1925, or Education Eeserves Act, 1925. This amendment would still leave free of duty transfers of land from the Crown for land settlement and such-like purposes, but will require purchasers of land from Government trading departments to pay the usual duties thereon. Shares in Foreign Companies. "(g) Impose duty at the same rate as is payable on the transfer of shares in Xew Zealand companies upon transfers of shares in foreign companies, including foreign mining companies, executed in Xew Zealand. At present such transfers escape duty in Xew Zealand. "(h) Increase the flat rate of duty on registration of mortgages and discharges thereof from 2/6 to 5/. "(i) Amend the definition of 'public authority' so as to exclude the Public Trust Office from benefits in favour of the Crown, and otherwise narrow the definition of the Crown for purposes of stamp duty. ' "(j) Require the Government Life Insurance and State Fire Insurance Departments to pay an annual license fee and receipt and cheque duties at the I usual rates. This proposal means placing these Departments on the same footing in regard to taxation as other insurance companies. "These proposed amendments to the Stamp Duties Act, apart from the increases in the totalisator duty and the banknote duty, are individually relatively small from a revenue point of view, but in the aggregate they will be of some assistance in meeting the Budget shortage. Extra io per cent Estate Duty. "Under the heading of death duties it is proposed to impose an additional 10 per cent estate duty on the amount bv which the final balance of an estate exceeds £100,000. This additional duty will bring in a considerable amount of revenue. without imposing hardship on anybody. "The exemption from gift duty is to be reduced from £1000' to £500 per person per year, and a duty of 2i per cent imposed on dutiable gifts of from £500 to £1000 in value. ■"The annual license fee for a sharebroker's license is to be increased from £2 to £5. • "It is proposed to reimpose the amusement tax on payments of 1/ or inore for admission to any entertainments."