STILL HIGHEST.

Auckland Star, Volume LXX, Issue 80, 5 April 1939, Page 13

STILL HIGHEST.

N;Z. COMPANY TAXES.

LEVIES IN AUSTRALIA.

COMMERCE CHAMBERS'

REVIEW.

The heavy rates of income taxation which applied to companies in New Zealand in 1937-38, compared with the rates on companies in Australia for the same period, were shown in tables which we compiled from official sources last yc-ir, says a statement by the Associated Chambers of Commerce of New Zealand.

For the year 1938-39 certain increases in taxation rates on companies have been effected in Australia, but, in spite of this, comparison still shows New Zealand companies of moderate and large size to be more heavily taxed than their Australian equivalents, adds the statement.

On a not income of £400 companies in New Zealand paid £B(iti, while the tax in the various Australian States, inclusive of Commonwealth tax but excluding any social security charge, ranged from £()()(> to £800. At £7000 New Zealand companies paid £224.), the Australian equivalents ranging from £10(J0 to £1505. Those Xew Zealand companies with a net income of £10,000 paid £3570, while the Australian range was from £1.115 to £21.10. The income of companies in New Zealand is taxed on a graduated scale, which reaches a maximum rate of 7/0 in the £. In Australia company incomes are taxed, except in three instances, at a flat rate, which is considerably lower, in each case, than 7/(i in the £. Inclusive of Commonwealth tax (at a flat rate of 1/1.8 in the £), and of special State tax, total income taxation on companies in New South Wales is. at the rate of 4/2.8 in the £, except that, as regards the special income tax of 10d in the £. dividends paid to resident shareholders out of the income of the year, within nine months after closing the accounts, may be deducted from the assessable income of the company. Differences between States. The total rate of tax in Victoria is 3/0.37") in the £, and in South Australia 3/1.8 in the £, while in West Australia the total maximum rale is 3/8.55, and in Tasmania 4/0.3 in the £. The maximum rate of income tax in Queensland on ordinary companies (not being public utility or monopoly companies) is 5/3 in the £. which, with special State taxes and Commonwealth tax added, results in a total maximum rate of 8/2.4 in the £. This total applies to companies with profits exceeding 19 per cent —the system in operation in Queensland being to determine the rate of income tax by the percentage which the profits of the company bear to the capital of the company. The amount of tax payable by a New Zealand company of £7000 ( £2245) is 49 per cent greater than the amount that is payable in Queensland on the same sum ( £1505, applicable to companies in which the profits exceed 0 per cent but do not exceed 7 per cent of the capital of the company), and on £10,000 (New Zealand £3750, Queensland £2150), it is 74 per cent greater. Detailed Comparisons. The amounts paid in New Zealand ( £2245 and £3750) are greater by 51 per cent and 77 per, cent on £7000 and £10,000 respectively than in New South Wales ( £1481 and £2110); greater in New Zealand ( £1758 and £3750) by 49 per cent and 89 per cent on £6000 and £10,000 respectively than in Tasmania ( £1178 and £1983); greater in New Zealand (£1758 and £3375) by 57 per cent and 102 per cent on £6000 and £9000 respectively than in West Australia (£lll3 and £1670); greater by 86 per cent and 138 per cent on £6000 and £10.000 respectively than in South Australia (£945 and* £1575); and greater by 93 per cent and 147 per cent on\ £(5000 and £10,000 respectively than in Victoria ( £909 and £1515).

The burden borne by Xew Zealand companies i« now about to be made all the heavier by the addition of the social security tax of ]/ in the £, adds the statement. Rather than that such increases should be made in the load, one of the prime matters to which attention should be given by the Government in the revision of land and income taxation, which it is undertaking this year, is the scaling down of the present rates of taxation on companies.