The Fanner and Taxation.

Bay of Plenty Times, Volume XLIV, Issue 6491, 18 September 1915, Page 4

The Fanner and Taxation.

(To the Editor.)

Sir, —One cannot help being amused at Mr Macmillan's style of newspaper controversy. "Your correspondent 'Butterfat' is total'y in error." "Your correspondent 'Butterfat' has failed to grasp," etc.

Now, Sir, your correspondent "Butterfat" is not in error, nor does he fail to grasp anythirg except the ob vious red herring with which Mr Macmillan tries to evade the point at issue. I said, and I repeat, that Cooperative Cairy Companies are exempted by a benevolent government from paying income tax on their profits. Mr Macmillai first positively denies thie, and when confronted with the exact word 3of the Act, he tries to make out that it means something different from what it siys. Briefly, the position is this: —

Ordinarily, the difference between the cost of goods and the selling price, less working expenses, is income, i.e., profits, on which tax has to be paid. With Dairy Companies, however, the position is as follows:—The cost price is the amount paid to the suppliers for butter fat, say Is per jjound, or whatever the figure may be. The profits are the amount of the difference between this and the price at which the buter is sold less the cost ot marufacture, etc. ; but, instead of the Dairy Companies paying incume tax out of this, the law says "Jf these profits are given back to the farmers, they are exempt from tax. I asked, and I repeat, why? Mr Macmillan would have us believe that the distribution to the farmers represents an additional price for the raw material; yet, the Act distinctly says "Income derived from the manufacture of dairy produce from nvlk, etc." Mr Macmillan ia only beating the air wher he talks of Dairy Companies I riving income from »Box Companies or Freezing Companies. I wonder what proportion of the local company's income is derived from such sources! To sum up;— Notwithstanding any. thing Mr Macmillan has said, the fact remains beyond any question that Cooperative Dairy Companies are exempted from paying Income Tax on profits made, with very insignificant exceptions; and it has not Deen denied, nor do I think it will be denied, that the local company, among others, has made thousands of pounds profits since its incorporation, which have not paid a penny of tax. The instance I gave in my first letter of the increase of £1600 in the value of their assets, over and above the bonuses, etc., has been carefully avoided by Mr Mac millan. If he wants to disprove my contention, I invite him to publish th* ■mounts appearing as profits in his company's profit and loss accounts as printed for say, the last six years, and the amounts paid as income tax by the companies of which, as he puts it so charmingly, "he has the honour to be Public Officer."—l am, t etc., I BUTTERFAT. Tauranga, Sept 15tb, 1915.