TAXATION RELIEF

Press, Volume LXXXIX, Issue 26987, 12 March 1953, Page 8

TAXATION RELIEF

Views Of Accountants’ President PRIORITY FOR FAMILY UNIT (New Zealand Press Association) TIMARU, March 11. “While it is recognised that high taxation is an inevitable development of a welfare State which is still carrying the financial burdens of two world'wars and of substantial defence expenditure, there are certain aspects concerning the basis of imposition of taxes resulting in anomalies that call for remedy,” said Mr L. M. Satterthwaite in his presidential address to the annual meeting of the New Zealand Society of Accountants this evening. “It was somewhat disappointing to learn from last year’s Budget that apart from the well-merited relief given to the estates of sheep farmers who died between September 1, 1950, and August 31, 1951, together with other farming concessions, nothing was done to implement the recommendations of the 1951 Taxation Committee regarding the more pressing inequities and anomalies of the taxation law,” said Mr Satterthwaite. “The Budget did. however, state that it was hoped that a consolidation of the Land and Income Tax Act would be ready for introduction this year, when the opportunity would be taken to make some procedural changes recommended by the Taxation Committee. “In anticipation of this, and in the hope that the over-all financial position of the country will allow of a generous measure of taxation relief, I personally endorse the opinion of the committee that the family unit should be given priority in any relief from income tax, and this by way of increased special exemptions in the following order of precedence:— Suggested Relief “(1) An increase in the present special exemption of £5O for children and other dependent relatives, and the repeal of the provision imposing a limit of £26 saving in income tax in respect of each child or relative. “(2) An increase in the present special exemption of £lOO for a dependent wife or husband, with the repeal of the similar limit of £26 mentioned above. “(3) An increase in the present personal exemption of £2OO. “(4) An increase in the present limit of £l5O in respect of the special exemption for life insurance premiums, superannuation contributions, etc. “Appropriate adjustments under these headings would enable and compensate for a discontinuance of the ‘flat rebate’ system which was adopted in 1948 and which offends the equity of the principle that where tax increases have been made on a graduated scale any subsequent reductions should be in accordance with that scale,” Mr Satterthwaite said. “The taxation committee gave cogent and compelling reasons for the above recommendations, and I look forward to the possibility of relief on these lines being given iji this year’s Budget. “While suggesting the priority of the above claims. I am not unmindful of the burden of taxation being carried by companies and industry generally, with the serious effect it is having on their ability to retain sufficient taxpaid profits to replace capital equipment and ensure continuity from their own resources. Realising also that company taxation is of necessity eventually incorporated indirectly in the cost structure, it is obvious that further relief, if possible, under this heading must rebound to the ultimate benefit of the country as a whole,” Mr Satterthwaite said.