TAXATION BILL.

Press, Volume LVI, Issue 16946, 22 September 1920, Page 7

TAXATION BILL.

CHAMBERS OF COMMERCE. conference: KOYAL COMMISSION URGED. ('SPECIAL TO "THE PRESS.") "WELLINGTON, Septomber 21. l"ho Land and Income Tax Amendment Biil was discussed by a conference of delegates of Dominion Chambers of Commerce, hold to-day in the Council room of tho Wellington Chamber. The conference was called mainly at tho suggestion of the Wellington body, which has taken groat interest in the Bill. Mr . A. S. Bankart, of Auckland, was elected chairman. The fact that.rovenuo liad to be found was referred to by tho chairman in his opening remarks. Whothcr the Treasury \vas not making too groat a demand on the Land and Income Department was a matter which was open to discussion. Tho Commissioner of Taxes was called on to find about 0 per cont. of that portion of the total revenue not provided by the public services, such as railways or tho postal ar.d telegraphic services. "If that amount," said Mr Bankart, "could be shown to bo detrimental to the general interests and development of tho country, then some other source of taxation might have to bo found, such as an export tax. However, tho members of the conference will probably agrco that the question is so vital that tho Government might set up a Royal Commission to deal with tlie wholo subject." Mr Bankart considered that tho Prime Minister might reply that the report of tho Iloyal Commission on the income tax question sot up in England was already in tho hands of the Government, but he thought that, while the evidence brought before that Commission was applicable to tho extraordinary ramifications of trade in tho United Kingdom, many of the statements accepted as axioms were open to challenge as applied to tho comparatively compact conditions of trade obtaining in this Dominion. Ho urged that it was advisable to reinstate tho clause in the Bill whereby business promises were exempted from tho oporation of the land tax. On the motion of Mr J. A. Frostick (Christchurch), it was resolved : —"That tho interests involved by tho Land and. Income Tax Amendment Bill are so vital to tho prosperity of the commercial and trading community of this Dominion, that the Government be asked to postpone consideration of this Bill in Parliament until next session, and in the meantime to appoint a Royal Commission with full and unrestricted powers to make enquiries." Members of the conference considered that tho meetir.c might suggest the personnel of tho Royal Commission, which should consist of various sections of tho community. SECTIONS OF THE BILL DISCUSSED. There was a general discussion on •each clause of tho Bill. Tho conference decided to urge tlio ■reinstatement of tho clauses providing .for tho removal of business premises from tho operations of the land tax. It was also decided to recommend that income received from superannuation and investments be exempted with a limitation. ' Tho conference favoured the taxation of municipal trading concerns. Referring to clause 14, Mr M. A. Carr (Wellington) said ho considered v that tho clauso proposed to charge in-come-tax ou debentures hold by investors out of Now Zealand. There •would probably be protests from abroad over the clause, and oversea in New Zealand securities might consider the clauso a breach of faith. Mr Carr.. referred to the Theodore . Acts ,'ctopfeciati'ng'tho value of private* securities on which British money has already been lent, and cited tho poor responso to tho appeal for further loans by the Queensland Government. The proposal of the New Zealand Government. was impolitic, if not unjust. The move came at a bad time, when tho Imperial Government had extended some recognition to complaints about double taxation which had been coming from oversea Dominions. The decision of the conference was to view with disfavour the proposal in section 14 whereby paragraph (h) of section 84 of tho principal Act is repealed. . A. The redrafting of sub-clause 3 of clause 15 was urged, in order to obviate ambiguity in tho sub-clause reading: "The earned income of any taxpayer shall not in any year be deemed to exceed the Bum of £2000." On clause 16 the conference decided: "That the total amount recoverable be limited to the amount by which tho taxpayer has benefited by reason of tho nllowanco of depreciation made in former ycara." Complaint of complexity was made against clause 20, the chairman favouring the deletion of tho clause. THE DEBENTURE QUESTION. Tho question of debentures and the tax was discussed when tho conference resumed in the afternoon. Mr H. D. Vickery said that debentures in tho past had meant "secure" money, and tne provisions of tho Act would militate against this. xur Bankart ■ referred to _ companies that had issued debentures on a aiding scale., Bv attempting to reach these cases tho Government was inflicting an injustice generally. Tho now provisions were cumbersome, and the new clause might have the effect of doing ft way with debentures. Tho conference decided that section 22 was inadvisablo as shutting up an avenuo of investment from which debenture capital had hitherto beeh raised. Supplementing his previous state* ■ inonts, Mr M. A. Carr said he considerod that tho smaller investor would object to paying 3s, and tho larger investor would not feel disposed to pay tax under the section, when it was taken as assessable incomo. The clause would act as a double-edged sword. The conferenco to refer clause 23 to the forthcoming Municipal Confeienco. Regarding the clause affecting the income of co-operativo cheese factories and dairv factories, it was explained that such concerns under clause 15 were now taxpayers. Mr A. D. Bennett stated that under j tho existing Act such companies were Uoi taxed. The tendency of co-opera^ tive concerns was to increase trade, , and there were no objections to tho clause. Importance was attached to clause 26, regulating assessments, it being considered that under tho clause a grievous mistake might be made, and no redress given by the Department. THE SCHEDULE. Expressing his opinion on the ' schedule, Mr Bankart said he thought that there was a lack of information as to now much money was actually required. The time had come when surpluses should not be built up, but ! rhould bo used. He took it for grant- ; cd that the Government would get a ! great deal more money than it re- ] quired. A delegate: They don't propose to j reduce tho war debt here by tho increased taxation. The following resolution was carried: —"The conference has no evidence before it to show what revenue is anticipated from tho schedule, but as appaV»)itly most of the surpluses in former years were secured from this source, and the same substantial surpluses aro not now requirod. the conferenco confidently contemplates that the Commis- ' sioner will be able to recommend a roduction in the surtax rate.;' i Tho conferenco will be continued to- 1 ] morrow at 10 a.m. '