WAR PROFITS

Dominion, Volume 9, Issue 2807, 27 June 1916, Page 6

WAR PROFITS

FINANCE BILL BEFOBE CABINET. The Finance Bill, to be introduced into tho House of Representatives this week, was considered by Cabinet yesterday, and will bo "further considered to-day. It was formerly understood that provision for the assessment of tho tax on war profits was to be mado in <• separate Bill, but it is now decided that it will all be included in the Finance Bill. This measure, it is understood, •will be of 25 clauses. It will differ in important respects from the British and Australian Acts, but, its authors claim for the Bill that it will be rather more effective than either of these measures. Pull provision is being made to ensure that in the levying of this heavy tax of 45 per cent, no injustices will be inflicted on those to whom tho special tax'may be applied. As has been stated, tho basis of assessment will bo the difference between tho war profit and the average profit for the three years preceding the war, but there will bo many exceptions to be met. It would not be fair, for instance, to charge as war profits those profits which are the result of the expenditure of increased capital, and tho case of those businesses which have increased their capital will be met in the Bill. There will bo an .exemption from taxation as war profits of a stated amount of profit. In England, the amount fixed in the Act is .£2OO, and in Australia .£2OO. Here it seems probable that as our income tax exemption is .£3OO, this may be tho exemption allowed for this special war tax. It may happen that a business, though earning a considerable income, is yet earning only a very small percentage on the capital invested. It 1b understood that provision is to be made for the exemption from war tax of such profit as may bo sufficient to return only a defined percentage on the capital. In Australia tho exempted percentage is 6 per cent, for joint stock companies, and 7 per cent, for private individuals, and as conditions in Australia are not dissimilar from ours, it is not unlikely that these will be the rates here.

There will be certain exempted classes. In Australia the classes exempt are: Municipal and other public authorities, friendly societies, religious, charitable, and educational organisations, agriculturists, offices or employments, professions (iu which profits depend mainly on the personal qualifications of the individual). Agriculturists in this exemption list do not include pastoralists and dairy farmers. It is understood that there will bo no Board of Appeal set up under the Act. The process of appeal will be. by-'application to a Magistrate, who will' hear and determine all appeals againsti allegedly unfair assessment. It was stated yesterday morning that, tho Government intended to limit rates of interest under this Bill. A great many people have understood that thjo Government had some such idea ifti mind, but it is now stated definitely that tho Bill will not deal with the rates of interest on .private advanaes. It will deal with tho rates of interest that banks will be allowed to offer for deposits.