DEVELOPMENT OF INDUSTRY

Press, Volume XCIX, Issue 29224, 7 June 1960, Page 14

DEVELOPMENT OF INDUSTRY

Effects Of Taxation

Aspects of New Zealand’s taxation system could retard the country’s industry in the “desired leap forward,” Mr S. Leathern, a director of Ambler and Company. Ltd., shirt manufacturers, of Auckland, says in a paper to be presented to the 1960 industrial development conference.

He said that evidence pointed to the fast that in such matters as the provision of capital by the establishment of company reserves, in the taxation allowances for depreciation, in the excess retention tax legislation, in the combined burden of company and dividend taxes, in the complexities and anomalies of present taxation laws, and in the provision for appeal in special circumstances there was much that was lacking. Approaches made by progressive countries overseas. notably Sweden, in meeting similar problems merited serious investigation

“They could, with appropriate modifications to suit local conditions. be copied, at least in part, with considerable advantage.” he said. Mr Leathern said the need to reduce the combined burden of company and dividend taxation, was very apparent. “It could mean either an Immediate transfer of burden to other sectors of the economy, or limited temporary deficit budgeting, or the postponement of this high priority relibf until national finances permitted.” he said Taxation reform implied no considerable long term cost to the State, while the measures would give the taxpayer immediate taxation relief to enable him to proceed with planned expansion, with the State recouping its taxation claim over a long period

“The very real prospect of growth in national income and taxable capacity should serve as a strong argument for these reforms.” he said.

The budget needs of the welfare State were great and could easily impose a pattern of inertia in taxation leading to an uncritical maintenance of established ideas and procedures, he said.

"In the coming period of rapid growth, industrial leaders will require to be courageous, flexible and imaginative in their thinking. Similar qualities of mind are demanded of the Government tn effecting taxation reforms." Mr Leathern said.