HEAVY BURDEN

Evening Post, Volume CXXIII, Issue 41, 18 February 1937, Page 8

HEAVY BURDEN

COMPANY TAXATION

"HIGHEST IN WORLD"

INDUSTRIAL LEGISLATION

(By Telegraph—Press Association.)

CHRISTCHURCH, February 17,

"The present rate of company tax compares with the British rate of 4s 9d and is perhaps the highest in the world. Such a heavy imposition must in the long run have a crippling effect on our industrial life, for there is little inducement to risk capital in new enterprises or to spend money on improvements to existing factory equipment when nearly 40 per cent, of the earnings goes away in tax," said Mr. W. H, E. Flint, chairman of directors, in an address to shareholders at the forty-ninth annual general meeting ofj the New Zealand Refrigerating Company, Ltd.

Reviewing the company's accounts, Mr. Flint said the balance available for appropriation was £26,941 15s 3d less than last year. The company's earnings were actually larger than in the previous year, but the increase in the rate of income tax for companies to 7s 6d in the pound had necessitated setting aside a much larger amount than was required in the previous year to meet the liability for tax. Land tax had also absorbed an. additional £1114.

Mr. Flint, in his address, said: "Tho preparation and shipment of chilled beef has continued at Imlay in common with a number <of other North Island works. This business is still in its early stages in New Zealand, and is not yet on a profitable basis from the company's point of view. Judging, however, from reports from London, the class of beef is rapidly improving, and reflects credit on the efforts of the producer. The preparatory work done by the company is also favourably commented upon.

"Since we last met there have been important additions to our costs arising out of Government legislation. In November last a new award was made by the Arbitration Court, and this award, with other increases arising principally out of new legislation (leaving out of account increases in income tax and land tax), probably amounts for the Dominion to £300,000 to £400,000. Arising- out of trouble about Christmas in Auckland,, the Minister of Labour (the Hon. 11. T. Armstrong:) directed freezing companies to increase this pay of hourly men, and we estimate the cost of this will amount to another £80,000 or £100,000. Directly or indirectly, this extra cost, which will probably be little short of half a million for the Dominion, will be a further tax on the meat producers of this country.

"Your directors caused thorough investigation to be made into prospects for the company's products in the Far East. lam glad to be able to report that a small but steady business is now being built up, and I think ws shall be in a good position to benefit from any general increase in the trade between this country and the East."

Referring to dividends, Mr. Flint said: "In the present circumstances I am sure you will agree that it is wise to continue a conservative policy in regard to dividends and to make as full provision as possible for future expenditure on renewals and extensions."

The directors recommended payment of the same dividend as last year, which was adopted.

The retiring directors, Messrs. W. H. E. Flint and E. Hay, were re-elected: