INCOME TAX TWICE OVER

Evening Post, Volume LXXXV, Issue 19, 23 January 1913, Page 3

INCOME TAX TWICE OVER

AN INJUSTICE AND* A PROTEST. The following article is reprinted from The Drapers' Record, of' 14th ' December :— . There is great resentment hi city- circles against the action of the New Zealand Government' in levying income tax on "all British merchants who. .do business in- the Dominion through an agent. To state the grievance in a nutshell, we may cite as an -example' the case of a British manufacturer , who does a business of £20,000 a. year in New Zealand, and makes through his agent a profit .of £1200 ' a year. This manufacturer has now to pay the New Zealand tax of Is in the £, and also the, British income tax of 16 2d in the £. In other words, he has to pay a double' income tax. Apart froln the question of the justice or otherwise of the imposition of the tax is 1 the method of assessment. An arbitrary rate of profit is assumed— that is to say, the authorities consider that a certain percentage' of net profit is earned upon all goods sent to the colony. For this purpose the volume of trade is ascertained, and a percentage is worked upon these figures. The unfairness of this will be apparent, as ' although in some classes of exports the x margin of profit may be considerable, in others it may be the reverse. Even in some cases trade may eventuate in a net loss to the exporter. The protest against this new tax has been talcen up very vig6rously in New Zealand, by, Mr. T.C. Dawson, of Messrs. Dawson and Maudsley, Ltd., indent and manufacturers' ' agents, Wellington. The Bill under which the new' tax is lovied was known as' the Bill for the Amendment of the Land and' Income As* sessment Act. Before it was passed into law, Mr. Dawson intervieAved the New Zealand Prime Minister and the Hon. Mr. Allen, who had charge 6t the Bill. These Ministers had the Commissioner of Taxes present, and. they were good enough to spend an hour hearing and discussing the matter. Mr.' Dawson plainly told them the feelirigs of British manufacturers on being taxed on the business they die! through an agent in a British Domihion. Notwithstanding this protest, the Bill became law. Mr. Dawson also, brought the grievance tinder the notice of the British Empire Chamber of Commerce conference, held in London in June last. This conference passed the following resolution on the matter :— ' "Whereas certain British administrations throughout the Empire claim payment of income tax, and whereas it not infrequently arises that the income surveyors of more than one administration claim payment of this tax in respect of the same income, that the next Imperial Conference be asked to consider whether 6ome commonly accepted guiding principle cannot be adopted amongst thp various administrations which will avoid the necessity for subjecting the income t»x payer to the hardship involved by the duplicated claim.' 1 As our readers are aware, there is now sitting a Royal Commission to enquire irito ways and means of developing trade between the United , Kingdom and the Dominions beyond the seas. The New Zealand officer to this Commission ,is Mr. Malcolm Ross, and Mr. Dawson has laid the whole facts before him', with the suggestion that he should bring the matter up for discussion. ,Mr. Ross consented to forward the papers on for this purpose. In the meantime, in order to bring the grievance into as much publicity as possible, it is suggested that the London Chamber of Commerce should convene a meeting, pass a resolution , and urge the Home Government ■to use its good offices in endeavouring to obtaih a remedy. •It has, to be added that the New -Zealand Commissioner of Taxes, in defence of the attitude of the New Zealand Government, has pointed out that the British Government made such concerns as the New Zealand Shipping Company .and the Union, Steam Ship Company of New Zealand, .which have offices both in London and the Dominion, pay British income tax on the business, that goes through the London offices. It would seem,, therefore,, that there may be grievances on both sides. .At any rate, it does not seem. right that British capital employed, in' New Zealand should have to pay income tax twice, and it is certainly a matter which should be very carefully discussed, by. the. Trade of the Empire Royal Commission now sitting. [Recent advices received by Mr. D.awson state that Honie firms .are putting the matter before the various Chambers of Commerce.]