Retention Tax

Press, Volume CVI, Issue 31164, 14 September 1966, Page 16

Retention Tax

Sir, —Retention Tax is a tax upon estimated profit for the following or subsequent year. What company or business would pay an invoice from a supplier for goods supplied or services rendered for a year ahead? Yet the Government demands this in the payment of retention or provisional tax. How is it possible to pay tax against an income which does not exist—Yours, WILLIAM J. WELMSHURST (Accountant). September 13, 1966.

Sir, —The kindly desire expressed by both sides of the House to give honourable interment, at some unspecified date, to dividend tax, is most laudable. As everyone knows, dividend tax was instituted to get money into the coffers now rather than later, irrespective of the retarding effect on the growth of private companies on which New Zealand largely depends for tax revenue. The suggestion that the Commissioner of Taxes, with or without guiding legislation, would be the best judge of how much dividend a company should declare is Utter poppycock. Any such legislation would constitute a further unknowledgeable and unwarranted intrusion into the affairs of private organisations. Dispense with the tax promptly but leave the commissioner to get on with duties for which he is better qualified.—Yours, etc., B. R. HOMERSHAM. September 13, 1966.