COMPANY TAX.

Auckland Star, Volume LXIX, Issue 208, 3 September 1938, Page 7

COMPANY TAX.

CRIPPLING EFFECT.

CHRISTCHURCH PROTEST.

«CANNOT DRAW PENSION."

(By Telegraph.—Press Association.) CHRISTCHURCH, this day. The Government's proposal to impose a tax of 1/ in the £ on company income for social security finance received unfavourable consideration at a special meeting of the council of the Canterbury Chamber of Commerce. The meeting Mas held in committee, but it was announced afterwards that a request was being sent to the Associated Chambers of Commerce to make a protest to the Government. "A company needs no health benefits and cannot become eligible for the old age pension,'' stated the letter to the Associated Chambers. It was stated in the letter that the protest on behalf of the Canterbury Chamber was based on the following grounds:— ' This increase of 1/ in the £ in company taxation has been disclosed at the last moment, and it is an important taxing measure. "Ihe proposed method of applying the tax will mean that shareholders will have to contribute more than 1/ in the £, in some cases up to 2/ in the £, or even more. This is brouzht about by the fact that the tax applies to company profits, whether distributed or not, so that if the company makes £1000 and distributes to shareholders £.300, the tax on shareholders for the year amounts to 2/ in the £ on the dividends received. •'The tax will mean a substantial reduction in national wealth owing to the fall in share values. This fact is already evident. "Companies are called upon to contribute to the special security scheme from which they receive no direct benefit. The company needs no health benefits and cannot become eligible for an old age pension. '"The tax will be applied on land tax, which is a fixed tax, irrespective of profits. This increase of 1/ in the £ on company taxation will further cripple enterprise, and production must suffer as a consequence. Many companies have already to pay more than 10/ in the £ for laud and income tax."