THE TAXATION BILL.

Press, Volume XLVIII, Issue 7922, 23 July 1891, Page 5

THE TAXATION BILL.

FULL DETAILS OF THE MEASUREIS* T___ta___p_t._ [JEOM OUB BPEOtAL OOKKESPONDBNT.] WELLINGTON, July 22. The Bill embodying the taxation policj of the Government was introduced into Parliament to-day by the Premier, and read a first time. The following, which are the schedules of the Bill, will show the operation of the new tax:— SCHEDULE A. I. THE ORDINARY TAX OST LAND. 1. Every person and company, being th* owner of land, Bhall be liable to tax in accordance with this Act, ami such tax Bhall bo assessed and levied upon the actual value of such land ; but the value of improvements upon all land owned by any person or company up to JB3OOO shall be deducted from such assessed value, and any mortgage then due or owing upon such land shall also bo deducted from such value. "Actual value" means the capital value ior which -he ....simple of l___itl U.tll all iirxj.irOT.-ozii__.t_. ti_ __.y> couU __ I>__._lz_3_<_ fo_■ cash. *- improvements " MlMja \]Q\\m iWI blinding*, fencine. IH-iiM-li li-«iKii rnni i.iiif<(iiif { ».. ijl planting, ilraining of l__.il, .leiirimj from timber, scrub, or fern, laying down in grass or pasture, but the effect or benefit of such improvements shall be visible and unexhausted at tho time of valuation, provided that ill tho ease of tho draining of land, clearing from timber, scrub or fern, and laying down in grass or pasture, no dedilution shall lio allowed for siiuli improve* ments, or such part thereof, as shall havo been mado or erected more than ten years prior to the date as at which tho us.es.in.nti is made. 2. When the assessed vaiuo of all the land of any order less than value of improvements thereon up to JS3OOO, and tho amount duo or owing on mortgage aa afore* said, does not exceed J21500, thero shall ba deducted by way of exemption a sum oi £500; provided that only ono exemption shall be allowed to an owner of land when such value and tho amount due or owing to him on mortgage do not together exceed £1500, but if the assessed value of such land and mortgage, less deductions, shall exceed .£I6OO, then no exemption shall be allowed ; provided further that where tho owner of any land or mortgage which does not produce a larger income than £120 per year shall be incapacitated by age, ill health, or other cause from earning further income from business or employment a further exemption, which, together with the sum of £300, hereinbefore-mentioned, shall not exceed JE2OOO, may be allowed to such owner by the Commissioner on his being satisfied that the payment of the tax in full would entail hardship on such owner. 3. Every purchaser of Crown land 'on credit or deferred payment, and the assignee or transferee of such purchaser shall be decided to bo the owner of such land for the purposes of this Act, and shall pay tho tax in respect thereof. Provided that every such purchaser may deduct tho amount duo or payable to the Crown by way of purchase money from the assessed value of such land as if it were a mortgage thereon. 4. The owner of auy leasehold interest in land shall be liable to taxation under thia Act upon the value of his interest in such land. The deduction of £3000 for improvements shall, as between the owner and the , lessee, be made in proportion to the in* terests of each of them on such improvements, and such proportion shall be ascertained and determined both as between the owner and the original lessee, or any sublessee, in such manner as shall be prescribed. 5. When any land is wholly exempt from liability to tax, every person or Company being in occupation of such land, tenant or otherwise using or occupying the same Bhall be liable to tho tax on the assessed value of the interest hold by such person or Company in such land. 6. Every person being the holder or occupier of any Crown lands for " mining purposes," within the meaning of the Mining Act, 1886, shall bo liable to tax as upon the income from the business and not upon tho assessed value of this interest in such land. Thi3 provision shall extend to any Company being the holders or occupiers of land for the purposes aforesaid. THB TAX ON MORTGAGES. 1. Every person or Company being a mortgagee of land shall be liable to taxation in respect of every mortgage held by such mortgagee, and every such mortgage shall be assessed as if it were land, but at the actual value of such mortgage to the mortgagee ; and if any difference shall arise oa to Buch value for the purposes of this Act, the same shall be decided by the Commissioners m such manner as may be prescribed, and a mortgagee shall be entitled to the exemption of £500 hereinbefore provided for, but not further. 2. No mortgagee shall bo entitled to exemption from the tax by reason only that the land included in such mortgage ia exempt from taxation. 3. No mortgage shall be liable to the graduated tax imposed upon land under schedule 6to this Act. "Mortgage" meana any charge whatsoever upon laud, or any interest therein duly registered or recorded in the manner required by law against or in respect of such land interest, and whether created by deed, will or any other instrument in any other manner. " Mortgagee " includes the person or Company entitled to a mortgage or any part thereof, and to receive the interest, or any pari thereof, payable in respect of any mortgage. SCHEDULE B. THE GRADUATED TAX OK LAND IN ADDITION TO THB TAX IMPOSED UNDXB SCHEDULE A. When the assessed value of land, afterallowing for all improvements thereon aa defined in Schedule A, exceeds the value mentioned in the first column of thia schedule "and "is .less than the amount mentioned in the second column thereof, every person or Company being the owner of such land shall be liable to a further graduated annual tax at the rate mentioned in the third column of this schedule. When the value And is loss Bate of gr» is than duated tax £5,000 £10,000 id 10,000 20,000 _-8d 20,000 30,(i00 |d 30,000 .0,000 4-55 -0,000 60.000 ftd 60,000 70,000 6-8 d 70,000 80,000 W 90,000 110.000 Id 110,000 130.000 lid 130.000 150,000 1 2-8 d 130,000 170.000 1 |d 170,000 190,000 1 .-gd 190,000 210,000 Ifid 210,000 — 1 6-Bd And suoh tax shall be assessed and levied on the total amount of the assessed unimproved value of the land. No reduction shall be allowed under thia Act in respect of any mortgage from the value of the Lind upon which such graduated tax is payable. SCHEDULE C. INCOME OF COMPANIES. 1. Every Company carrying on any bush neaa, adventure, or concern in New (other than a Company wholly or mainly carrying on the business of life insurance), Bhall be liable to the tax on income, which ahall be assessed and paid by such Company in respect of the gams and profits derived or received from such business in each year ending on the thirty-first day of March. The income of the Company Bhall include dividends paid, sums carried to reserve fund, and any other profits made or income derived from the use or product of lands, and not divided among shareholders or S ergons entitled to such gains or profits tiring snch year as aforesaid. 2. Ju_ any case where a Company has at any time borrowed money on debentures from persons not resident in New Zealand, such Company shall be deemed to be the agent of such debenture holders, and be liable to pay tax accordingly, and every such Company shall have the right to recover from the debenture holders any tax so paid, but no such debenture holders shall be allowed any deduction by way oi exemption from liability to such assessi ment.

3. No Company shall be entitled to any exemption in respect of the assessment foi tax on income, but the person receiving any income in respect of any share or interest in any Company shall not be liable to tax thereon.

4, In reeped* ot OerapaolM or Awoota*

tions carrying on business of life insurance in New Zealand (including the department created under the Government Insurance and Annuities Act, 1874), the tax shall be assessed and paid upon the income derived by e.ch such Company or department from investments of any kind other than investinents in land or upon mortgages of land. SCHEDULE D. I-fCO-TE I-tOM BUSES_SS. 1. Every person shall be liable to tax in respect of income derived from business on the full profits or gains of such businsss. "Income derived from business" means the gains or profits derived or received in New Zealand from any trade, manufacture, adventure or concern in the nature of trade, whether the same shall be respectively carried on in New Zealand or elsewhere, in each year ending on the 31st day of March, and not taxed under any other schedule of this Act.

2. The tax shall be assessed and paid by every person upon the income derived from business, as aforesaid, and when the taxable amount of income so derived has been ascertained in accordance with this Act, every person or firm of partners engaged in any business shall be entitled to a deduction by"way of exemption of £300, and no person, whether in partnership or carrying on business alone, shall be allowed more than one such exemption either in respect of business or employment or emolument. SCHEDULE E. INCOME FROM EMPLOYMENT OB EMOLUMENT. 1. Every person shall be liable to tax in respect of income derived from employment or emolument and not derived from business as aforesaid. " Income derived from employment or emolument" means the gains or profits derived or received in _ew Zealand each year ending on the 31st day of March, and whether such person is residing in New Zealand or elsewhere, from the exercise of any profession, employment, or vocation of any kind not otherwise liable to taxation under this Act; or from any salary, wages, allowances, pension, stipend, or charge or annuity of a kind not charged on land.

2. The tax shall be assessed and paid by every person upon the income derived from employment or emolument as aforesaid, and when the taxable amount of income so derived has been ascertained in accordance •with this Act, every person or firm of partners engaged in any employment shall be entitled to a deduction by way of exemption of £300, and no person, whether in partnership or engaged in such employment alone, shall be allowed more than one such exemption either in respect of business, employment or emolument. SCHEDULE F. MISCELLANEOUS RULES AS TO ASSESSMENT OF INCOME. 1. All losses and outgoings actually incurred by any person or company in production of the income shall be deducted from the gross amount of his income. 2. But in estimating the balance of the income liable to tax in the case of business, employment, or emolument, no sum shall be deducted therefrom for (a) any sum expended for repairs of premises occupied for the purposes of the business or employment nor for any sum expended for the supply of or repairs to or alterations in any implements, utensils, or machinery employed or used for the purposes of such business or employment beyond the sum usually expended id any year for such purposes; (b) nor on account of loss not connected with or arising out of snch business or employment, nor on account of any capital withdrawn therefrom, nor for any sum used or intended to be used as capital in such business or employment, nor for any capital used in the improvement of premises occupied for the purposes of such business or employment; (c) nor on account of any interest which might have been made on such sums _f laid out at interest ; (d) nor for any bad debts except bad debts proved to be such to the satisfaction of the Commissioner, (c) nor for any average loss beyond the actual amount of loss after adjustment, nor for any sum recoverable under any insurance or contract of indemnity; (f) any disbursements or expenses whatever not being money wholly and exclusively laid out or expended for the purposes of such business or employment; (g) any disbursements or expenses of maintenance of the parties, their families or domestic establishments (h) nor for the rent or value of any dwelling-house or domestic office, or any part of such dwelling-house or domestic offices except such part thereof as may be used for the purposes of such business or employment, not exceeding such proportion of the said rent or value as may be allowed by the Commissioner ; (i) nor for any sums expended in any other domestic or private purposes distinct from the purposes of such business or employment. 3. The computation of tax arising in respect of any business or any employment carried on by two or more persons jointly, shall be made and stated separately and distinctly from any other tax chargeable on the same persons, or any of them. ■ 4. Every Company and local authority and every person carrying on business or engaged in any employment shall, in such manner and form as may be prescribed from time to time, furnish the Commissioner with lists of all persons employed by. them and the salary, wages, and stipend or other allowances or emolument paid to each such person. 5. Allowance made to any person by way of house rent and all amounts received or receivable by way of extra salary, bonus, allowance, or emolument shall be taken into account as part of the annual income liable to taxation.

6. When any person or Company occupies for the purpose of business or employment any land in respect of which tax on land is payable by him or it under this Act for the same period, such person or Company shall be entitled in any return of income for such period to deduct a sum equal to 5 per cent. on the amount on which such person or Company is liable to pay tax on lands. The measure, which has forty-eight clauses, is entitled a " Bill to regulate the assessment of land and income for the purposes of taxation." The preliminary clauses Erovide for the repeal of the property tax. a the interpretation clause the word " Company" in the Bill is held to mean every corporate body not registered under the Acts relating to Friendly Societies, Industrial and Provident Societies, and Trades Unions. The officer for the administration of the Act appears to be called the Commissioner of Taxes, and another person, to be Deputy Commissioner of Taxes, shall be appointed. The persons holding the offices of Property Tax Commissioner and Deputy Property Tax Commissioner shall be deemed at the commencement of this Act to hold the offices of Commissioner and Deputy Commissioner of Taxes. Every Company carrying on business in New Zealand shall be represented by a person residing in this colony, and he shall be called the„ Public Officer for the .purpose of this Bill, and shall be answerable for the doing of all acts required to be done in virtue of the Bill for the purposes of taxation. Every agent or trustee shall in the same way be answerable in order to the assessment of the land mortgage or income which he represents.

The taxation is to be levied at stated rates in the pound in accordance with annual Act to be passed for that purpose. The land exempt from taxation shall be land occupied by a place of worship or a place of residence for the clergy and ministers of any religious body; any public school established under the Education Act, and all land not more than two acres and buildings used for any school which ia not carried on exclusively for pecuniary gain or profit; the site ol any university college, public library, athenaeum, mechanics' institute, or museum, or public cemetery, a place of meeting for any agricultural society or friendly society, public charitable institutions, public gardens, domains, &c.; land owned and occupied by Maoris only, any public railway, or any land belonging to the Government, local bodies, tec

The incomes exempt from taxation shallbe the public revenues, the income derived by Friendly Societies and ail public bodies and Societies not carrying on any business or not being engaged in any trade for the purposes of gain to be divided among shareholders, and the income derived from land or the use or produce of land, or from mortgages of land. The manner in which land and income shall be assessed is provided for in clause 17, which provides that returns shall be made by every person and company to the Tax Commissioner for the purpose of enabling assessment, to be prepared. The re-

turns as to land and mortgages shall be made triennially by every person and annually by every Company and as to income annually by every person and Company, but the Commissioners shall have the power to ask for further or fuller returns at any time. If a mortgagee of land is not resident in New Zealand and has no known agent the mortgagor shall be deemed to be the agent of the mortgagee and liablfc to be assessed for and pay tax. Joint tenants and trustees in respect of the same interest shall be assessed jointly, and shall be severally and jointly liable to furnish the returns. Objections to any assessment may ba made by any person or Company or by the Tax Commissioner, and all objections shall be heard and determined by a Board of Reviewers, whose decision shall be final and conclusive. The Tax Commissioner shall give fourteen days' public notice of the tax falling due. No statute of limitation shall bar or affect any action or remedy for recovery of any tax under this Bill. The Governor in Council, on the recommendation of the Commissioner, may at any time during a triennial period whenever he deems expedient for the protection of the revenue purchase and take for her Majesty any landor any interest therein mentioned in any return made under thi3 Act, and may pay to the person or Company making such return, and to whom the said property or the interest therein belongs, the sum at which such land is valued in such return, together with £10 for every .£IOO of such value, unless such person or Company shall within fourteen days after notice shall have been given by the Commissioner to such person or Company, consent to have the same assessed at the value which the Commissionershall think was the fair actual value thereof at the date as at which the return relating thereto was made or ought to have been made. If any person shall "be _L3s_-i__.ed with, the amount at which the whole or any portion of his land is assessed, he shall be entitled to call upon the Commissioner either to reduce the assessment to the stun at which it was valued in the return of such person, or else to ptirchase sucli land at the sum at which the same was valued in such return ; and the Commissioner shall, at his discretion, reduce this assessment accordingly, or shall, upon obtaining the consent of the Governor in Council, and upon having the land duly conveyed and assured to the Crown, purchase the same. No person shall be entitled to avail himself of the privilege conferred by this section after the expiration of ten days after the sitting of the Board of Reviewers or Resident Magistrate, as the case may be, who has fixed such assessment. The Bill prescribes

the procedure in Courts of Law for the recovery of taxes, and also the penalties for neglecting to make returns or for making false returns.

The second reading of the Bill has been fixed for Friday.