WAR LOAN POINTS

Evening Post, Volume CXXX, Issue 95, 18 October 1940, Page 4

WAR LOAN POINTS

QUESTIONS ANSWERED

Certain points in connection with the Government interest-free war loan are made clear by the Minister of Finance (the Hon. W. Nash) in a reply received by the Associated Chambers of Commerce of New Zealand to representations made through,that body.by a joint taxation committee composed of representatives' of the Associated Chambers, the New Zealand Farmers' Union, the New Zealand Manufacturers' Federation, and the New Zealand Federation of Drapers, Clothiers, and Boot Retailers. The Minister advises:—

Valuation of Trading Stock for Income Tax Purposes.—Any increase in income for the year ended March 31, 1939, brought about by the inclusion by the Commissioner of Taxes of an amount in respect of a stock reserve created in any other year will be ignored in computing such taxpayer's income for the year ended March 31, 1939, and the tax will be computed as if the amount had not been included in the income. The stock reserve, therefore, will not operate to increase the liability of the taxpayer to contribute to the war loan.

Spreading Payment of Instalments of the Loan.—The provision for payment of instalments in October and December, 1940, and March, 1941, was deliberately adopted by the Government to spread payments as far as possible for the current financial year. This war loan represents loan requirements essential for war purposes during this financial year and I think your chambers will appreciate that to spread the payment over a longer term will not be possible in the circumstances.

Gifts made to the Government for War Purposes: Under the prospectus for loan provision is made for taxpayers to convert free of interest loans paid to the Government for war purposes to stock in the .war loan. I agree that the contribution made by a person who has donated money to the Government as an outright gift is greater than that effected by a free of interest loan for a limited term.' The Government will be glad to give consideration to the case of persons who have made gifts.

Hardship on Taxpayers: Similar circumstances apply in regard to this point and all these cases can be dealt with from the point of view of hardship on an appeal.

Non-resident Persons and Companies These persons and companies are liable to payment of income tax in respect of income derived in New Zealand and liability to contribute to the loan is based entirely on their income tax. The income is earned by the use of assets and investments in New Zealand which participate in the protection afforded by means of this Wai* Loan and I cannot see any reason why they should be less liable to contribute than similar assets and investments owned by New Zealanders. In exceptional cases an appeal can be made and the particular circumstances can then be taken into account.

The Minister adds: "The Government appreciates the desire of the Associated Chambers to co-operate with it and to assist in having these provisions framed as equitably and efficiently as possible."

Certain other points are still under representation to the Minister by the committee.