HEAVY TAXATION

Ellesmere Guardian, Volume LXII, Issue 17, 4 March 1941, Page 3

HEAVY TAXATION

METHOD OF ASSESSMENT

CRITICISED

ANOMALIES SEEN

"Just where the law of- diminishing: returns proceeds to operate in connexion with taxation, it is not possible to say, but surely it must have been reached in the case of New Zealand," said Mr W. H. Nankervis, president of the New Zealand Society of Accountants, in his address at the annual meeting of the society in Wellington. "I have not yet heard or read of any country having .taxation where the amount of tax payable reaches 17/6 in the pound, as it can in the case of some individuals in New Zealand. Now that the excess profits tax is in operation, this rate in some cases will be increased. While it is reasonable that no one should make excessive profits during the war, one does feel that the greatest effort is obtained where reward is made for merit and ability. "The taxing legislation still contains a number of anomalies which, in justice to the business community, should be remedied. Among them I would mention the many serious anomalies which have arisen out of the proprietary company method of assessment, the undue degree of the discrimination between earned and unearned income and the non-allowance of proper accounting deduction for exhaustion of capital expenditure in respect of leasehold premises.

"One result- of the present high taxation in New Zealand must be that the spending power of those on medium and high incomes will be reduced, whereas those in the lower income group, whose incomes are hardly affected by taxes, will have a greater spending power than normally. The result must be a decreased demand for luxury or specialty lines while certain other types of goods will probably have an increased turnover.

Import Control "Import control was introduced in order to conserve overseas funds and to assist the local industries. Just whether it will be possible to lift .this control after the war one cannot say, but unless industry in New Zealand. is to receive a serious setback, it will be necessary to continue these restrictions for a long .time. This legislation, together with the war conditions, has given the secondary industries in New Zealand a great impetus, but they are all labouring under very high costs of production, and any decision to.discontinue the control of imports, immediately after the war has finished, would probably mean that many of them would go out of business. It may be that we will just have to go on paying high prices for a local article, which could be imported and retailed at a lower price."—"The Dominion."