WAR TAXES

Dominion, Volume 9, Issue 2579, 29 September 1915, Page 8

WAR TAXES

• RECENT ADJUSTMENTS INCREASE IN Tflg BEER .DUTY "Oil DUTIES REMOVED MORTGAGE TAX RAISED * ALTERATIONS EXPLAINED The Financo Bill,, which is intended to give legislative"'sanction^to'-'tho Govern..meat's new: taxation proposals, was Intro-, 'duced ■ into ' the' House of -Representatives . last evening, .and the -Finance: Minister -claiming : urgoncy, .'tlie House, was asked to pass the at. one sitting. Earlier in the afternoon Sir Joseph Ward submitted to tlie House the, following resolu- . ' tions relating to' Customs duties, and he seized : the opportunity to ' give .to the. ..:House'a.'general review of-the new.taxes .;. as-they were proposed in. the Bill.. ■ ..-.'.

Customs and Primage Duties. 1. The resolutions passed- on,' August 2G, 1915, relating; to duties of. Customs 'and Rxcise are revoked so; far as they re- . kto to oils, mineral, oils, mineral spirits; and refined minetal oils, 'but shall-other-. v-V'.wise remain in full effect;- ~ : ' . -, 2. There shall be levied,; collected, and : ' paid upon all goods imported on or after ■/:.: September,29, / 19i5,'(with..-the exceptions '■!: ! hereinafter .mentioned), whether otherwiseliable to" duties of .Customs or : ilot,. and Yin addition to any other such duty, a duty of .Customs (to be termed , -primage duty) of 1 per centum of the value thereof..'' 3. In the case of goods imported on or - '. ' after -September 30, .-1915;- and. entered - for warehousing, - primage duty shall be ; . paid at the time of. entry. .. . J < -1. In the case of goods entered for warehousing, primage duty sliall : not. be pay--1 able on the subsequent entry thereof, for . Vhome .consumption,' -whether, the goods • were warehoused before or after the date of.these resolutions. - ' 5. Tho goods mentioned in thel schedule -hereto shall bo exempt from- primage . duty. • 6. These resolutions .shall not extend to tlip importation of goods into the Cook •- Islands, .-V;'.'-- ■ Exemptions. - 'Following- are the I ,.exemptions from primage, duty-.— Ostrich feathers grown in New Zealand, "when returned from abroad dressed, or dyed, upon eyidence being produced to. :"fi::th'e,satisfaction of a: Collector of Customs as 11 , to their previous exportation, r' VArticles, "being exhibits; for public 'dis- . play only in public museums, whother purchased nnder bond or"directly imported by, or for presentation; to such museums, upon ' declaration ; that such" goods - will not be sold or otherwise disposed of ... in. New Zealand without payment of any • duty-which'may be payable. : Paintings, statuary, and worla ct art, .. . whether purchased under bond or directly - imported by, or for presentation to any ■. public institution or art 'association, registered as a body , corporate, for display ... in the; buildings: of such institution or association; and not to bo sold or otherwise disposed of; statuary or works of ' - art, whether purchased -under bond, •or directly imported,'..'for v display in any (public park or place; on conditions pre- . 'scribed by the Minister.-' - Medals, including only-'old. or second-, hand war medals, ./humane, ■societies;' medals, and other similar medals; also ■ old. coins. . .•••■-' .Apparatus, appliances, ' article;, find ! - materials, : for educational purposes, as ... may be, approved, by ''the; Minister, and -under - conditions prescribed by him. ■ 'Official supplies for consular officers c£ 1. " countries' .where'. a similar...'exemption exists iii favorfr oif British Consuls.. ' Passengers' baggage and effects, includ. ; - irig only wearing apparel and other personal effects that have been worn or ars :in use by, per&iis arriving'in New' Zea- . .land,'Valso.implements, 1 instruments, and ' tools of ' trade, occupation, •or " employ- . riient,~b£ 6Uch"perso'ns. not exceeding..£so :. .in value,, aiid household'' or 'other effeotg not.exceeding- J!100 in Value^which-' have v b:en in use for twelve 'months' prior' to ... . embarkation by ' the ". persons ior families bringing'them to New Zealand, and which ■ ' are not intended for any other person or ■ persons, or- for sale; «lso cabin, furnishings belonging to such .persons'not ex- .' cecding in value .£lO. ' • .Returned empties-which; are; identified as such.to the satisfaction-of a Collector : of; Customs. v: - • •• Specie.- . - . ri'ish ova. •••■• Goods pJ o*ide<l for by Sections 139, 140, and ill of the. Customs, Act, 1913; ,

\ ' Oils- and Beer. ~ ; Sir' Joseph Ward, in submitting these resolutions to the. House,; said that. the whole discussion of. the . Budget had in two gouits—the ' taxes dn'niineral oils'and on Deer. The . mortgage 1 tax hail also been criticised to •a, lesser, extent. In going into' the whole (matter very fully he had been hopeful that it might have been possible to exclude from the proposals'.oil and petrol /ftised for industrial' purposes. It was found impossible, however, to ear-maric' iniiy particular oil and, place/it on the . jfrea list;-''He had realised that, for varijtaus reasons, with some of which he did ratot agree, members were averse to the ['•tax, on kerosene and petrol. . Speeches l-generally were in the direction of increas-f-ing the tax on beer. He hadj-ecommend-'ed his colleagues to substitute for the proposed oil tax a one per cent, primage tax on all goods' imported into New Zealand. ' Tho. the oil tax ... .meant a loss of .£191,000 per, annum on /the l taxation proposals. . The proposed ■ono per cent, primage tax, based on an annual importation of » value of l ; .£2o,ooo^oo'would bring in 1£200,000 per -. annum. The annual importation might, of course, be more or . less, and the proceeds of the primage tax would depend on the total importation. It would be realised that' the Government,, in amending its proposals, ; could not givo .anything' away. ■; ; It was proposed, to increase the beer tax ■V -by another.farthing. •. ?. ■ ' * Hon. members: "No,"' and "Too nnich!" ! Sir Joseph Ward: And this would in- " 'crease the proceeds of the extra tax to ■: between J>70,000 and -£80,000 per annum. The manner of levying the fax would be : the same as originally proposed, that was to say, according to the alcoholic strength . :of the beverage. He expected that the total extra tax on beer would bring in ' at loast and there "would be an- ! other .£7OOO or .£BOO or more from tho increases on stout.- •

i \ • The Mortgage Tax. / \ To mate lip tlie loss, in revenue .entailed ty the alterations in the Bill, it was necessary to increase the mortgage tax by Jd., (to bring it up to ,Id. That would bring ; tho proceeds to between , c£(!0,000 and or more. It was' not possible for the Government at a time like the present (■to go in for a graduated mortgage tax. was doubt as to wliat would be the ( working >of such a tax, and the Government could not wait at present for experimental. developments. With the time, that would lSe occupied m putting the tax riiito operation it would take the Government all its time to get the proceeds, in ?<lurinpr the current year at all. During the Financial Debate the question of mortgagees not being dealt with for war tax purposes had been ttferred to. It was intended to meet that, difficulty and to have an 4ncomo tax Applicable. to mortgarrees, so as to , ensure • mortgagees making their war contrbution to the rev- . erne They would be called on to con- . tribute about £30, OW. per annum. The effect of the alteration would be that mortgages would be assessed in the ordinary way for mortgage tax charged at 1,1. in the £. Later it would bo ascertained what tax would be payable on tlio interest derived from the mortgage. It bucli incoiue tax was in excess of the land tax notice would ue sent claiming the income tax and showing credit for ' the amount of land tax paid-practically j, demand for the difference. The effect would be that Jtho income tax was to be paid oa the interest of the mortgage sitfrj

i a proviso that tlie tax paid should m 110 case bo less than' the amount,that would bo paid by assessing the capital sum of the mortgage at Id. in the X- Mortgages totalling up to approximately ifiIO.OUO, it' the assessablo income did not exceed £2000, would pay Id. in the £. If it wore over that amount a graduated income tax at the rate of id. in the aud upwards. would be paid on the income. This would ensure that while a mortgagee might pass tho mortgage tax on to the mortgagor, he could riot pass , the ; income tax on. That change, was provided for in the Finance Bill. ,

Telephone Charges. Telephone bureau charges, which it had heen.proposed to increase to 6d., would be allowed to ■ remain at 3d. With'-regard to the proposed tax on non-alcoholic beverages, it* was found difficult to get the income' this year, and it was proposed to appoint a Customs officer with the powers of a commissioner to enable him to investigate and report, with a view to enabling the tax to be effectively levied.

. Differences Explained.' .The. Minister went on to say that tho difference in the financial proposals as they were set forth in the Bill, as compared, with the Budget, forecast, could bs summarised as follows t— ■ Remissions. Tax 011 oils 191,000 Telephone fees 20,000 . Non-alcoholic liquors - 20,000 . income tax 80,000 Total remissions v. ; >£314,000.. New Taxes. ■ • ; £■ ■■ One per cent, primage 200,000 Farthing mortgage tax 65,000 Income on mortgagees 30,000 Additional ■ beer duty- 15,000 ;'Total-.pf„npw taxes Commenting-oil-these figures; Sir;Josephi. "Ward said''th-it, as explained,"' the tax on non-alcoholic liquors could not'be collected this year. It had been found that fewer of the moderate farmers than at first thought would pay income tax—the tax would be bome by the larger , farmers. The estimated amount to be derived from farmers* income tax had therefore to be reduced by i£Bo,ooo. .'There were other avenues of taxation, but they would not be exploited afc present.' Members should understand-that,, where the proposed taxation was taken .off, it had to be made up elsewhere, because - the.,two> millions of' extra revenue was necessary. In conclusion ho asked'the House, to put the new measure through that'evening. Haste was necessary,' because the money was required, and a very great amount of Departmental work was necessary before the new taxation could be imposed. . The resolutions were agreed-to.

BILL BEFORE THE HOUSE TAXES HEAVY. BUT NECESSARY. The' Finance Bill; was introduced by Governor's Message and read a first time. The' Right .Hon. Sir Joseph Ward moved the.second reading and claimed urgency for tie measure which was granted after some, discussion . ■ „ . Sir Joseph -Ward said that the Bill was firing effect to the Budget proposals, and e did not think, the time warranted delay.- Everyone recognised that it was our bounden duty to: make sacrifices from a monetary point of view, to assist those ■who were fighting for us. All the taxation had a bearing on that. He.did not disguise tlie fact that'for New Zealand the taxation was heavy,'but no one vtouM deny that the taxes were necessajy. He proceeded 'to give a detailed explanation of the Bill. The Beer Duty. Mr. G. V- Pearce (Patea) said he did not approve of the 1 per. cent: primage, because it would affect, all goods imported, even tlie greatest necessities. He would -have .liked to see the ;extra duly collected'oneome one commodity, say, tea, for instance. He disapproved of the mortgage tax increases, which would certainly increase tli9 interest rate in this country. He gave notice that in Committee he would move an. amendment to tie part of the Bill relating tobeer duty. His amendment would -be to delete that section if tlie Bill providing for a new method of collection, and his object vas to signify .to the Minister and tho Government that the duty ought to be levied by tho present'method, and that the amount of duty should be raised from 3d., at which rare it had 1 stood, for 30 years, to. lid. per gallon.' /He' was of opinion that fcy the old | method tie duty oould be collected with greater ease and certainty thin by tie proposed -new method. No trade could better bear extra taxation than the beer trade. It was the largest and probably the most injurious monopoly 'in ..existence m New Zealand. It had caused a great deal of wealth' to come into very few hands, tK© monopoly had' been brought about by legislation, limiting the a amber of hotels. Ho hoped his amendment would be accepted, but if not he intended to press the House to a division on the question. Mr. J. M'Combs .(Lyttelton) contended that land and incomes were not sufficiently ■ taxed.' The primage duty to raise J200,000 would mean that would.be passed on to tho public, with the inevitable result of an increase in the cost of livin". There was no special effort to get out after extra war profits.The Lot of the Working Man. Mr.'W. Nosworthy (Aslburton) contrasted the position of tho working man in England, and Now Zealand, and pointed out that in England a tax of 3d. was put on kerosene, and Is. per lb. on tea. Ii any class' had reason to. be satisfied wifli the New Zealand taxation proposals it was the working-class people; they had got off lighter than any other section of the community. This Government had not said, that they were going to tax tho 1 working man's-wages, but in England the twice-earner • cauie under the income-tax-proposals. ■ The working man under the: British flag in New Zealand was better; off than tlie working man under the British flag in any other part of the Empir.e.. He was afraid if the war lasted another year they- would /have, to face- an EKKlitiorial: of -.taxation, and ' they,, would- facojit. as cheerfully as they were going *to : face this .-£2,000,000. . > Sfi'.- L.' It: Isitt (Christclmrch North), opposed tl/6 primage tax, but said that it was an impassibility for the merchant to pass it, on when prices were standardised. He hailed with • some measure .of Satisfaction the change in the beer duties to induce the liotelkeepers to sell lighter beers. Even if this meant tlie reduction of beer Tevenue ho would stillsupport it because he -was not in favour of increasing the Tcvemie. at the expense of the sobriety of the -people. He would not support Mr. Fea-rce a : amendment.

Another Amendment. •; Mr. .T. V :;B. : Hi'ne . (Stratford) ' said, that he ; '■ did not support ; the amendment. of . the member for Patra, ' because' he believed in the proposed new .method of assessing the beer duty. ,He.., proposed to move an amendment to.'the motion for second reading: "That, all the words after, 'that' .be omitted with the object of inserting the following, ' 'this House disagrees :with the proposal to impose a primage duty of one per cent.,, and is. of. opinion a minimum tax of 6d.'per gallon be imposed on beer, and that, there should be a' corresponding reduction in proposed primage ■ duties."' He believed that a majority of members in the House favoured the increase in the beer duty, and tlio objection to the primage duties wa9 that they were a tax on the. necessaries of life.- He thought the proposed loan of two millions for expenditure on pnblio works was too big. He held strongly the Opinion that expenditure on public works should be reduced. Every young, ablebodied man who was medically fit for military, service should be dismissed at once. At present on all public, works there were young men employed who had no thought of offering their services to the Empire. The country was borrowing money to keep these youiw men in work here when it was their duty to be doing other work somewhere else. He hoped the House would carry his amendment for the increase in the beer duty. He expressed a fear that the new taxes would not provide the extra revenue required. Mr. P. C. Webb (Grey) advocated a protective duty of 2s. per ton on imported coal. This would bring in a tax cf ,£20,000 a year, would develop our own coal mines, and would add to the wealth of this country. He would support State control of the liquor traffic. He deprecated Mr.' Hine's suggestion that workers should bo dismissed from public works' in order to force tlichi to go to the war. ■'3k. Jennings: Why doesn't ho go himself?. Mr. is