WAR FINANCE MEASURES APPEAR

Dominion, Volume 33, Issue 2, 27 September 1939, Page 11

WAR FINANCE MEASURES APPEAR

Increases In Income Tax, Death Duties And Gold Tax

MORE MONEY FROM BEER, SPIRITS, TOBACCO AND POSTAGE

Over £9,000,000 For Defence This Year

Increases in income tax, death duties, taxes on beer, wine, spirits and tobacco, a surcharge of Id. on every letter, and an increase in the export tax on gold were announced by the Minister of Finance, Mr. Nash, in the House of Representatives last night, as part of the measures to be taken by the Government to raise the £9, 750,000 estimated to be required to finance war activities for the remainder of this financial year. The difference between the total so raised, added to the money already voted for defence and the total required, is to be made up by the use of Reserve Bank credit, and by borrowing. This total applies to expenditure in New Zealand only. Mr. Nash estimated that for the first year of the war about £20,000,000 would be needed, and that the amounts required in later years would probably be at least that sum. The increases in taxes are: Income tax, 15 per cent.; death duties, 33 1-3 per cent.; beer, 3d. a' gallon, making the amount 2/a gallon; wines and spirits, 15 per cent.; tobacco, 25 per cent.; gold, a tax of 75 per cent, of the difference between the price at August 24 and the price on the date of the sale of the gold. A surcharge of a penny is to be placed on every letter from October 1. Income tax applies to the amounts payable on income earned in the year-to March 31, 1939, on which tax is at present payable.

The tax increases are estimated to produce for the remaihder of this financial year £2,408,000 of the total of £9,750,000 required. The unexpended portion of the £3,200,000 already voted for defence will also be paid into the War Expenses Account, which will handle all war expenditure, and, in addition, money in the Public Works Account which would have been applied to defence preparation will be paid into the War Expenses Account. It is estimated that there will be a difference to be made up amounting to more than £4,000,000. For the full year, the additions are expected to produce £3,720,000. The following table sets out the estimated returns from the additional taxes for the remainder of this financial year, and for a full year:—

Legislation dealing with the new rates of taxation, establishing the War Expenses Account, and confirming the resolutions fixing the increased duties on tobacco, spirits and beer, and the tax on gold, was introduced and read a first time.

Remainder of year. Full year. £ £ Death duties . ... 175,000 700.000 Income tax ... ... 1,440,000 1,440,000 . 250,000 500,000 Beer duty ... ... 100,000 200,000 Tobacco duty . ... 273,000 546,000 Gold duty ... ... 110,000 220,000 Wine and spirit duty ,...• 60,000 120,000 Totals ., ... 2,408,000 3,726,000