DEBENTURE TAXATION

Dominion, Volume 17, Issue 290, 24 August 1923, Page 3

DEBENTURE TAXATION

EFFECT ON HARBOUR BOARD.

The chairman of the Harbour Board (Mr. G. Mitchell), at Wednesday’s meeting, informed the members that he had made a protest to the Government in connection with the increase in debenture taxation from 2s. 6d. to 4s. 6d. “It has now been made clear,” he said, “that the increase only applies to debentures issued after the passing of the Act and not to present debenture holders.” He mentioned that at present about 60 per cent, of the debenture holders had below the assessable limit of taxation; 35 per cent, would bo taxable at less than 4s. 6d. in the pound, and less than 5 per cent, would pay 4s. 6d. or over. The effect of the new tax would be that the whole of the latter class (mostly financial institutions from which the board received considerab'e sums and who were paying the highest rate of income tax), would not invest money in the board’s debentures in future.

“As the board will require to borrow a considerable sum within tho next year or two for the Thorndon reclamation and other works., it is doubtful if such money could be raised from local investors of small means, and tho board may therefore have to raise a loan in Great Britain or increase the rate of interest for local money,” said Mr. Mitehell. He was of the opinion that the increase in debenture taxation was unwise.