MORE TAXATION.

Auckland Star, Volume LXIX, Issue 208, 3 September 1938, Page 4

MORE TAXATION.

FOR SOCIAL BENEFITS.

STOCK EXCHANGE CONCERNED,

PROTEST BY MR. H. KITSON.

(By Telegraph.—l'ress Association.)

CHRISTC'HURCH, Friday

That stock exchange values liad fallen appreciably immediately on receipt of the news of the amendments to the Government's social security legislation, was claimed by Mr. H. Kitson, chairman of the Stock Exchange Association of New Zealand, when commenting this evening on amendments which bring companies into the scope 5f the social security taxation. Mr. Kitson, who said that he had the unanimous support of the stock exchanges of New Zealand in his attitude, protested strongly against the Government masking its intentions to bring companies into the taxation until the third reading of the Social Security Bill.

'"This practically prevents company executives from placing before the Government their representations about the effect of the amendments," Mr. Kitson said. '"Of all the increases that have been made in company taxation, I do not think that any has come with practically 110 warning, as in this case. It is all the more disturbing, since the Government had so many opportunities of advising the commercial community of its intentions. Payment Without Benefit. "It ought also to be realised that in these amendments the Government is departing entirely from the essence of its justification for social security-—that is, that those who pay the taxation should receive the benefits, medical and financial," Mi'. Kitson added. "No company wants medical attention, and none will get financial assistance. "The heavy increase in taxation must mean that the commercial expansion of Companies in New Zealand will be seriously retarded. In some eases this taxation may be passed 011 in higher price for manufactured goods, thus increasing the cost ot living. The contraction of national wealth' must also be very considerable if this new provision is persisted in. The adverse effect 011 companies has already been shown by a serious drop in prices on to-day's markets, not only in companies directly affected by the new taxation, but also in bank shares, which are exempt from this particular tax, but which naturally suffer from any repercussion on other companies. A Typical Case. "The effect of the taxation on one particular company whose figures I took out to-day will show the general effect," Mr. Kitson said. "011 it's figures for the last year this new taxation will involve the payment of approximately £4500. If the taxation was on the basis of individual shareholders and their dividends the payment would be £693. I would suggest that when companies send dividend statements to their shareholders in future they should show the amounts that have been deducted by the Government for taxation, so that the small shareholders would' realise the amount of taxation they are paying. One of the features of this new taxation is that it will hit the medium to small shareholder .harder than large compames Then, what is going to be the ultimate fate of those superannuation funds a ready existing and being generously subsidised by companies? And what about future investments in sound enterprises . Stock exchanges throughout New Zealand have used every endeavour to guide investors into New Zealand conti oiled and owned companies, and this additional taxation will make it exceedingly difficult for them to justify continuing to do so. Further, it will frighten away any capital at all inclined to invest in New Zealand securities."