TAX ON SAVINGS

Evening Post, Volume CXL, Issue 60, 8 September 1945, Page 9

TAX ON SAVINGS

OPTION ADVOCATED

STIMULATING RECEIPTS

The insertion of ai\ additional clause in the Land and Income Tax (Annual) Bill to enable persons contributing to national savings to pay the income tax on such contributions annually or when the principal sum was repaid Avas sought in the House of Representatives yesterday afternoon by Mr. R. M. Algie (National, Remuera). The amendment limited the option to an amount not exceeding- £100 in any one financial year. The Chairman of Committees (Mr. R. McKeen), however, ruled that such a clause was foreign to an annual taxing Bill, but said it could be moved when, the Land and Income Tax Amendment Bill was before the House. The purpose behind the amendment was that immediate encouragement would be given to put money into national savings, said Mr. Algie. The idea was not original. Seamen had added to their pay a certain amount contributed by the shipping companies, and later on a similar amount paid by the State. With regard to the second sum, national and social security taxes were deducted and the balance credited to the seaman in a national savings account. It was still part of income, but to encourage a seaman to put it into savings and keep it there the Crown thought it wise to allow him to pay income tax on it either in the year it was received or later, when all the savings were withdrawn. He had not raised the matter with a view to saying anything against seamen — for whom he had the greatest admiration—but because the scheme was so excellent and should be extended. ADMINISTRATION COST. The Minister of Finance (Mr. Nash) said the amendment would be foreign ;to an annual taxing Bill, which he had never known to be amended in I that way. It could be put into the Land and Income Tax Amendment Bill which would be brought down this session, and if the proposal were practicable he did not know why it should not be put into effect. It would cost money for administration, and if such an option were applied to national savings the Government might have to extend it to Post Office Savings accounts. The Leader of the Opposition (Mr. Holland) said he was rather surprised and a little disappointed that the Minister did not adopt the proposal. If it could be done to one section of the community, surely it was only fair to do it to other sections. He appealed to the Minister to extend something that had been originated by the Government itself. The Bill was put through the final stages and passed.