“TIME NOT YET"

Auckland Star, Volume LXXVI, Issue 188, 10 August 1945, Page 7

“TIME NOT YET"

EASING OF BURDEN MINOR CONCESSIONS Parliamentary Reporter. WELLINGTON, this day. A special depreciation allowance of 20 per cenf of the cost, of new plant and buildings in aid of newindustrial activities, to be spread over five years, and an allowance as a deduction in assesing income-tax of the cost of royalties, research and patent rights are provided for in the Budget. Announcing this in the House of Representatives last night, the Minister of Finance, Mr. Nash, said these adjustments would just become effective in respect of income earned during the next financial year—that commencing April 1, 1946. "War taxation presses heavily upon all sections of the community, and it is recognised that it leaves little to cover the risks inseparable from undertaking new ventures." said Mr. Nash. "The tinie has not yet come for a general review of taxation, for we still have heavy costs of war and rehabilitation to meet. Nevertheless, this is the time when plans and preliminary arrangements should be made for expanding production as soon as man-power and materials are available. Those contemplating new industrial activities are naturally wondering what will be their post-war taxation position. To assist and encourage them the Government proposes to make certain adjustments in the basis pi taxation to first become effective, in respect of the income earned during next financial year." Mr. Nash pointed out that the ordinary depreciation rate on plant is 7i per cent on the diminishing value, while the ordinary depreciation rate on buildings is 1 per.cent in respect of reinforced concrete, l* per cent in respect of brick, stone or concrete walls and 2} per cent in respect of wooden frame. In the case of buildings the depreciation is calculated on the original cost. He pre sented a table showing that. tne normal rate.of 74 per cent diminishing value had been allowed on plant, with an additional special deprecja tion of £4000 in each of five; years (a total of £20,000 being 20 per cent of the cost of plant, £100,000). As regards buildings, the. table showed lper cent on the original cost plus a further £4000 for each o : tne yeaj-s, making a total, of f 0 - 0 ?" special depreciation, equivalent to w per cent of the original cost ot buildings.

"Double" Taxation May Go "In the ordinary course, special depreciation allowance were sSfeffSAfflS_^ of £50,501," added the Minister, in the case 'of buildings; the normal residual figure would be £ ™£Y' h i e compared with £75,000 in the taDie. "The incidence of. taxation in ge* eral is under examination ana Proposed during the yearj steps to remove any proved mju tices or anomalies." t The Minister said an. agreement had recently been concluded oe tween the United ICingdom and tn United States Governments ehminating "double" similar agreement was contemplate between the United King d ° m r e by New Zealand Governments wherew English companies branch factories in. n^ W p United would be taxable in the UII b . Kingdom on the total profits, Ject to a credit for tax paid in « Zealand on the New Zealand pro^rii A similar principle wouldi converse cases. This would ena new industries, with, the a <£* ulae of overseas patent rights, forroi i and key personnel, to be estaDiisu m the Dominion.