KAIAPOI WOOLLEN

Evening Post, Volume CXXVI, Issue 69, 19 September 1938, Page 12

KAIAPOI WOOLLEN

HALF PROFITS IN TAXES

Shareholders of Kaiapoi Woollen Company, Ltd., at their annual meeting on Friday resolved: "That ..this meeting of shareholders of the Kaiapoi Woollen Manufacturing Co., Ltd., in annual meeting assembled, representing shareholders with an average holding of 330 shares, having a marketable value of £150. desires to enter an emphatic protest against the social security tax as imposed on profits of limited liability companies and which, in the case of ordinary shareholders of this company, equals 2s 7d in the £1, from their dividends, and points out that this tax, in addition to land and income tax, places a burden on the industry this company is engaged in which it is practically impossible to carry, and which, generally, will have serious effects on industrial production within the Dominion." The resolution is to be forwarded to the Prime Minister and Minister of Finance. Mr. T. W. Lewis, director, said the directors were unable to recommend the same dividend as last year, and this was the diamond jubilee year of the company. Taxation was the reason for the smaller dividend. "In fact," said Mr. Lewis, "we are paying to the Government nearly half the profits, and much more still if we have to pay the national social security tax. It must be disquieting to shareholders to feel that the taxation proposals dip into such a very large amqunt of the profits that the company makes. The chairman (Mr. Arnaud McKellar) said the directors regretted that the surplus had been reduced, owing to futher increases in costs, and some considerable recession in trade during the latter half of the year. Another adverse factor had been the contraction in the wool clip of the Dominion. In the event of the Social Security Act coming into operation," added Mr McKellar, "the company will have to carry a further and unexpected burden m the social security tax, which on the third reading of the Bill was made applicable to companies. If the tax becomes applicable, we propose to pay it by deducting the amount of same from dividends."