Tax concession for mining envisaged

Press, Volume CXI, Issue 32783, 7 December 1971, Page 20

Tax concession for mining envisaged

<N.Z. Press Association) WELLINGTON, Dec. 6. Legislation wiU be introduced next year to give all holders of mining licences a deduction for exploration and development expenditure. The Minister of Finance (Mr Muldoon) said when moving the second reading of the Land and Income Tax Amendment Bill that the question of what rate of tax should be payable when mining income was derived by taxpayers other than companies would have to be studied before the legislation was introduced. The bill contains provisions which provide that the income of mining companies will be provided.on a factual profit-and-loss basis. All costs of exploration and development can be claimed as a deduction and the tax payable will be at two-thirds of normal tax rates.

Representations requesting an extension to include individuals and partnerships had been received, but these had

come too late for any amendments to be made this session.

Provisions “inadequate” Mr P. Blanchfield (Lab., Westland), while agreeing that mining companies were treated better for tax purposes than other companies, said the provisions were not as good as in other countries. The bill removed tax concessions which had been available for 70 years. Mr M. A. Connelly (Lab., Wigram) said that the bill had the effect of increasing taxation of mining companies and would act as a disincentive.

It was true that mining companies were treated in a special way, he said, but it had been pointed out at the National Development Conference that there should be further incentives to make the mining industry mor* attractive.

He wondered whether the Minister of Finance’s real purpose was to assist the industry or to drive investment away from a productive area.