TAXATION: ITS INCIDENCE

Evening Post, Volume CVIII, Issue 63, 11 September 1924, Page 9

TAXATION: ITS INCIDENCE

THE. NEW ZEALAND INCOME TAX

The New Zealand income tax^dlffers ia several important respects from" _the ' British income tax. It was first introduced by the Land. and.lncome Tax Assessment Act of 1891, and took the place of the property tax, which, practically, had been a capital levy upon all descriptions of property, irrespective of tleir earning capacity.. The .new. .tax .was imposed upon all incomes, ihose of companies as well as thoie *of individuals, with an exemption of £300 in the case of individuals only.' Companies" "were charged a flat rate of Is in, the pound, while individuals were charged 6dJ in the pound on the first taxable £1000 and Is in the pound on taxable income above £1000. The higher rate "was charged only on such part, of the taxable .in- - come as exceeded £1000. Incomes derived from freehold farms.paying land .tax were not charged incomer tax, but incomes derived from - pastoral leaseholds were charged. AMENDMENTS IN PEACE TIME: * iqin 1636!"1; 6, 5 / emaino!i unchanged 'till If 0: ,J n that year-the principle-of graduation was appEed for-the'-first rTnl' t M 0 - CaS6 °f resided companies taxable incomes! of £1250 paid'ls in the pound; of £12(50 to £2000, Is Id • and of £2000 and over" Is 2d In the case of firms and individuals taxable w C°J^ of £40° »aid 6d *» the pound? Pvhn in? 00 £Wo>~9d-' °f £800' to' £900, 10d; of £900 to' £1000 "lid-' of £1000 to £1250, Isj-of #1250 to £200S Is Id; and of £2009 and over Is "M Debenture-holders in companies were charged at the rate of Is i n the pound the companies .paying, the amount -as agents for the debenture-holders. 'These applied to the higher incomes. In the case of registered -companies taxable inupon each pound, above-.the-lower amount; of £1600 to £2400, Is 2d, pld 3 i £ P™ ny»" and «f- £2400 and over Is 4d. In the case of -firms and individuals taxable income of £400 p^d PJus 5-400 of a penny; of £1400 to £2400 £..400 and over Is 4d. The rate paid by debenture-holders gained unchanged at Is in the pound, 'and some comparatively tnflmg concessions were.made S !li eed l «*. 1» into, account here. Though this revision recognised the principle of graduation, companies continued to pay mcome tax on what practically was a flat rate. The maximum of Is 4d m the pound was reached with an income of £2400, while even' the smallest income paid Is in the pound The difference was bo slight that it seems to have been regarded scarcely as an essential part of the system. BURDENS ■OF THE WAR. The war brought many drastic changes m the taxation system of the Dominion.. IS ew sources of revenue had to be found and the existing sources had to be strained to.theix utmost capacity. The income tax became the chief mainstay of the country. -The steeply graduated rate T^' * ?*«, and notwiti^ standing the wholly changed c ir cum . stances companies continued to be treated as individuals. The maximum income from debentures was taxed at a, much lower rate than income from other sources, and a difference was made between income obtained from company debentures and public body debentures j&Tm"? loans were issued tax "«: freehold farmers, who paid land tax only in pre-war days, were required to pay income tax. The maximum rate was reached at 8s 9 3-5 din the on a taxable income of £10,000. It was later reduced to 7s 4d in the pound, and last year was brought down to 5s 10 2-sd, in the ponndon the same income. - The e.^ lluf tei haS announced.that..thi s jear it i S; to be further reduced by 13 l-o per cent. "* REBATEMENTS AND CONCESSIONS. The income tax pursues its relentless way by many paths, in all cases regarding companies as individuals, and treating them worse than individuals by denyng them non-taxable rebatements and other concessions the individual taxpayer enjoys It ma y seem a little like putting the cart before the horse, but for the present we may defer further consideration of the graduated income tax on ordinary .incomes and recount briefly some of its subsidiary excursions Income from tax-free war loan stock bears no tax, and is not assessed with other income for the purpose' of determining the graduated rate on the other income Income from farming operations pays no income tax, and, like the income derived irom tax-free stock, is not assessed in determining tho graduated rate on other income. Income from Crown leaseholds bears no tax, but this exemption an-' pears-to have come, about by an oversight, and probably will be withdrawn Income from public body debentures issued prior to last year's Finance' Act"is. taxed at a maximum graduated rate 'of 2s 6d m the pound, and is not added to the income .received from other sources for the purpose of fixing the" graduated rate. Income from company debentures issued prior to the Finance Act of last year is taxed, at the maximum'graduated rate of 3 S in the pound, and enjoys the same exemption from graduation as does income derived from public body debentures. Income derived from public' body or company debentures issued subsequent to the Finance Act of last year is taxed ata maximum graduated rate of 4s 6d in the pound, and is not added to the income obtained from other sources for the purpose of graduation. Wheie companies have agreed to pay interest on their debentures free_ of income tax, they are charged tho maximum graduated rate for debentures and the debenture-holders are not allowed any rebate. Dividends received by shareholders from a company^ the profits having been taxed in the hands of the company, are not taxable in the hands of the shareholders "and" "are not included in. the income from other sources for the purpose of graduation. Some State trading- departments pay a small amount of income tax, but much less than would be paid by similar concerns in private liands. Other State trading departments pay no tax.1- Public body trading and public utility concerns pay no income tax. " " Particulars that now have been given, of the character and operation of the income tax systems of Britain and New Zealand will enable an intelligible comparison between the two systems to be made.

Pmk-hued stone for paving the promenade is being tried at an English seaside resort. It is believed that it will lessen, the glare on sunny days. A boot, claimed to-, be the largest ever made, measured thirty-five inches fromheel to toe; it was shown at a recent trade exhibition at "Northampton.