FINANCE BILL

Evening Star, Issue 16515, 29 August 1917, Page 2

FINANCE BILL

.FULL SCOPE OF THE ; . MEASURE. TAXATION PROPOSALS FOR THE YEAR. [l3 s Teleohaph.] ' WELLINGTON", August 28/' Tho Finance Hill, which was introduced in the House of Representatives to-night in charge.-"of Sir Joseph Ward, is a measure of 76 clauses. LAND AND INCOME TAX. It sets" out rates of Land Tax and Income Tax for the year commencing on April 1, 1917, as follow : Land Tax.—(l) Where tho unimproved value on whioh Land Tax is payable does not excoed £I,OOO, the rate of Land Tax shall be Id for every £1 thereof; (2) where the unimproved value on which Land Tax is payable exceeds £I,OOO, the rate of Land-Tax shall be Id for every £1 thereof, increased by cue thirty-two thousandth part of Id for every £1 in excess of £I,OOO, but so as hot to exceed in any case a rate of 7d in the £1; (3) in addition to the Land Tax payable as provided in clause (1) or clause (2) of this part of the schedule, as the case may be, there shall in every case be payable by way of Land Tax an amount equal to 50 per cent, on the Land Tax so parable. Income Tax.—(l) On incomes assessable under' subsection (3) of section 112 of the Land and Income Tax Act, 1916, the rate of Income Tax shall bo Is for every £1 thereof; (2) on the taxable income of companies the rates of Income Tax shall be as follow:—(a) Where the income on which tax is parable does not exceed £1,6C0, the rate shall be Is for every £1 thereof; (b) where such income -exceeds £1,600, the rato shall bo Is for every £1 thereof, mcr«ased by one two-hundredth part of Id for every* £1 in excess of £1,600, but so as not to exceed in any case the rate of 3s in the £1; (3) on the taxable income of all taxpayers other than those referred to in clauses' (1) and (2). hereof, the rates of Income Tax shall be'as follow: —(a) Where the income on which tax, is payable <loos not exceed £4OO, the .rate shall lie 6d for every £1 thereof.; (b) where such income exceeds £4OO, the rate shall be 6d for every £1 thereof, increased by one twohundredth part of Id for every £1 in excess of £4OO. but so as not to exceed in any case a rate of 3s in the £l.

Exemptions.—Exemptions from Land Tax are. fixed at £SOO where tho total unimproved value does not oxeeed £1,500 ; p.v.d when the value exceeds £1,500, a deduction of £SOO, diminished at the rat© of £1 for every £2 of that excess, so as to leave no deduction when that value amounts to or exceeds £2,500. In lieu of above reduction, there may hededucted,as special- exemption, from the total unimproved value of tho land of.the taxpayer, in cases where that land, or any pait thereof, was at noon on the 31st day of March preceding the year of assessment subject to mortgage, the following amount:—(a) Where the total unimproved value does not exceed £3,000, tho sum of £1,500: or (b) where the total unimproved value exceeds £3,000, the sum, of £1.500, diminished at the rate of £3 for every £4 of\ that excess, so as to leave no deduction under this paragraph when that value amounts to or exceeds £5,000. A sjxjcial clause empowers the Commissioner to grant exemption in a case of hardship or where the taxpayer is a widow with dependent children. Special Exemptions.—The Bill provides that half Xand Tax shall bo payable in respect of land held by a religious society exclusively for religious or charitable purposes, or*of land held by any association of persons exclusively for the purposes of outdoor sports other than horse-racing, not conducted for pecuniary gain. Clause 34 enables the Commissioner of Taxes to refund to the shareholders of a company, if a shareholder's total income was less than £3OO, an amount equal to tho amount of tax paid by th© company in respect_ of an amount of its income equal to dividends raid bv it to the shareholders.

SPECIAL WAR TAX. (1) Where the income on which the special war tax is payable does not cx'ceed £4OO, the rat© shall be 6d for every £1 thereof; (2) where ths income oa which the special war tax is payable exceeds £4OO, the tax shall be 6d for every £1 thereof, increased by one two-hundredth part of Id for every £1 in excess of £4OO, but so as not to exceed 3s in £1; (3) to tho rate 3 prescribed by clause* (1) and (2) hereof respectively there eh all bo added an additional rate equal to 50 per cent. thereof, and tho total shall be the rate of tlie special war tax r»ay<iM-e> Y>y the taxpayer. (JOMPULSOKY. WAll LOAN .SUBSCRIPTION. The section dealing with compulsory subscriptions to the war purposes loan states that it shall be the duty of every taxpayer whoso taxable income for the income year ended March 1, 1917, was not less than £7OO to subscribe to the war purposes loan, 1917, an amount equal to three times the total amount of Land Tax and Income Tax (exclusive of excess profits duty) for which lie was liable under the Finance Act, 1916, provided that no obligation to subscribe to that loan shall be enforceable, under this section until a notice under the hand of the Commissioner of Taxes is served on the taxpayer. If any taxpayer to whom this section relates has subscribed to the loan authorised to be raised by section 35 of the Finance Act, 1916, an" amount exceeding one and a-half times the amount of tax for which he wns liable, as aforesaid, the amount so contributed by him in excess shall be deducted from the amount which he is obliged under this section to subscribe to the war purposes loan, and his obligation to subscribe to that loan shall bo modified accordingly. lr any taxpayer to whom this section relates has not subscribed any amount to the 1916 loan, the amount which he is obliged to subscribe to the war purposes loan, 1917, shall be increased by an amount equal to one and a-half times the amount of Land Tax and Income Tax (exclusive of excess profits duty) for which ho was liable under the Finance Act,_ 1916. If any taxpayer to whom this 'Section relates has subscribed to the 1916 loan an amount less than one and.a-half times the amount of Land Tax and Income Tax (inclusive of excess profits duty) for which ho was liable uudej; the Finance Act, 1916, the amount which he is obliged to subscribe to the war purposes loan, 1917, shall be increased by an amount equal to the difference between the amount so subscribed by him and one and a-half times the amount of tax aforesaid. If the Commissioner of Taxes has reason to believe that any person has not subscribed to the war purposes loan, 1917, to the extent to which lie is bound so to do by this section, he may, by direction of the Minister of Finance, call upon that person to subscribe to that loan an amount to be specified, not exceeding in the aggregate the amount which by this section he is obliged to subscribe. Any person upon whom a notice under this section is served may within 14 days appeal to the Commissioner of Taxes, and may on appeal produce evidenco to show cause why he should not bo bound to comply with the terms of the notice. If, on the hearing of an appeal under this section, it is proved that the appellant has subscribed to any war funci or other patriotic fund in connection with tho war, the Commissioner shall deduct the total amount of such subscriptions from the amount which the appellant is obliged to subscribe to the war purposes loan. The Commissioner may, on any appeal, exempt the appellant either wholly or in part from his obligation to subscribe to the loan, or may allow time for the payment of the whole or any portion of the amount demanded, or he. may dismiss the appeal. For tho purposes of an appeal the Commissioner may have associated with him the Secretary of the Treasury and the Government Insurance Commissioner, but the determination of every such appeal shall be with tho Commissioner of Taxes. If any person on whom a notice is served under this section, and who has not appealed, oV vlhos© appeal has not been allowed, fails to comply with the terms Uf that notice, or with the terms of that

notice as 'modified by the Commissioner oir appeal, he shall be chargeable hy way of penalty with an additional penal tax equal to double the total amount oi the Land Tax and Income Tax' (exclusive of excess, profits duty) payable by him under the- Finance Act, 1916. The Governor-' General may, by Order in Council, make such regulations as may be deemed necessary for the purpose of giving effect to the provisions of "this section. ■ BEER DUTY. The section dealing with the increased rate of duty on beer manufactured in Now Zealand provides that where the specific gravity of the worts utod in the production of the beer does not exceed-1,047 the duty shall be at-the rate of 5 12-16 d per gallon. Where the specific gravity of the worts exceed 1,047- flje duty per gallon shall be at the rate alore&aid, increased by l-16d for every unit of specific gravity above 1,047, but so that in no case shall the rate exceed 6d per gallon. The Bill imposes, restrictions on the hours during which brewers may sell or deliver beer. It will be unlawful to eell or deliver on Christmas Day, Good Friday, Sunday, or any day when it is unlawful to sell intoxicants in any licensed premises, while, except by permission in writing of a collector of Customs, beer may not bo delivered on any day except between 7 a.m. and 6 p.m. Power is given to the Minister of Cus toms to cancel or suspend a brewer's license if the holder is not a person of good reputation, TOBACCO, CIGARS, AND SNUFF. The duty on tobacco manufactured in . New Zealand is fixed as follows: —On cigars and snuff, 4s per lb; on cigarettes, if manufactured by machinery, 3s 6d per lb; on cigarettes, if made by hand, 2s per lb. If the.manufacture of cigars and snuff containing less than 75 per cent, of tobacco grown in New Zealand is, in the opinion of the Minister of Customs, at any time unduly detrimental to the public revenues, the Governor-General may fix the maximum quantity of such cigars and snuff that may be made in any year by any manufacturer at the aforesaid rate of 4s per lb, and may prescribe a rate of duty not exceeding 6s 6d per lb upon all cigars and snuff made by or on behalf of that manufacturer in excess of such maximum

quantity. BACKING AND LOANS. Banks carrying on business in New Zealand may be authorised to hold as part reserve securities other than public securities. In order to facilitate the investment of small sums in the loans, the PostmasterGeneral may agree to issue war loan certificate's on condition that the purchase money be paid by monthly or other instalments extending over a period not exceeding 16 months. Trustee's are given discretionary power to borrow money upon the security of the whole or part of their trust estates for tho purpose of investing their money in inscribed stock war purposes loan. Power is given to continue tho banks' extended privileges of note issue until five years after the termination of the present war. ■Savings banks are authorised to invest funds, including reserve funds, in the loan. The Bill authorises the -raising of £1,850,000 for public works, including the employment of discharged soldiers, and it increases to £40,000 per annum the amount which may be loaned under the Fruit Preserving Industry Act. Authority is "given to borrow an additional £40,000 for tho pxirposes of the Rangitaiki Land Drainage Act. Tho borrowing powers under the Discharged Sof'iers' Settlemont Act, 1915, are extended from £IOO.OOO to £500,000. AMUSEMENTS TAX. The rates of the Amusements Tax are set out as follow: Payment for admission (exclusive of the iimount of tax): Exceeding 6d but not exceeding 2s 6d, amusement tax payable, Id ; Exceeding 2s 6d but not exceeding ss,

amusements tax payable, 2d: Exceeding 5s but not exceeding 7s 6d, amusements tax payable, 3d ; Exceeding 7s 6d but not exceeding 12s 6d, amusements tax payable, 6d; Exceeding 12s 6d, one shilling for the first 12s 6d and one shilling; for every 10s or part of 10s over 12s cd. Entertainment .includes any exhibition, performance, amusement, game, or sport to which persons are admitted f6r payment. The tax will come into force on and after November next. The method of paying the tax is set out in clause 54 : (a) With a ticket stomped with a stamp (not before used) denoting that a proper amusements tax has been paid. (b) In special casas, with the approval of the Commissioner, through a barrier which, or by means of a mechanical contrivance which, automatically registers the number of persons admitted, unless the proprietor of the entertainment has made arrangements, approved by the Commissioner, for furnishing returns of the payments for admission to the entertainments, and has given security up to an amount and in a manner approved by the Commissioner for the payment of duty. Provision is made for the computation of the tax where the payment of admission is by means of a lump sum. Any person admitted without payment of the revenue duty is liable to a fine of £5. and the proprietor of the entertainment to a fine of £SO in respect of each offence.

—Exemptions.— The Amusements Tax shall not be charged on payments for admission to any entertainment'when the Commissioner is satisfied—(a) That the whole takings thereof are devoted to 'philanthropic or charitable purposes, without any charge on the takings for any expense of the entertainment. (b) That the entertainment is of a wholly educational character, or is exclusively for the benefit of any school or other educational institution or institutions not established or conducted for profit. (c) That the entertainment is intended only for -the amusement of children, and that the charge is not more than Id for each person. (d) That the entertainment is provided for partly educational and partly scientific purposes (but for no other purposes) by a- society, institution, or committee not conducted or established for profit. Clause 58 provides that, where the Commissioner is satisfied that the whole of the net profits of an entertainment are devoted to philanthropic or charitable purposes, and that the whole of the expenses of the entertainment do not exceed 20 per cent, of the receipts, there shall be refunded to the promoter the amount of tho Amusements Tax paid in respect of the entertainment.

PENSIONS INCREASES. The Bill provides for an increase of £l3 per annum in old age, widows', military (other than the present war), end miners' phthisis pensions, and £6 per annum in respect of each child of a widow receiving a pension. This section is deemed to have been operative from September 1, and shall continue in force during the present war with Germany and for 12 months thereafter, and no longer.

FIRST READING PASSED. MINISTERS EXPLANATION. [Fxioji Our Paruamentahy Reporter.] WELLINGTON, August 29. When the Bill was introduced, the Minister of Finance (Sir . G. Ward) made a long speech in explanation of its terms. One 01 the most important provisions was that inliicting penalties on persons and corporations who had not contributed to the loan of 1916 or to the present loan. He very much regretted the necessity for .such a provision; but the country must get 22, and perhaps 24, million pounds. This was a very largo sum to be raised within the Dominion. What was everybody's business was nobody's business, and unless there was some such provision as this to impress his duty on everybody people might be inclined to leave it to the other •fellow, and there would be a danger of the failure of the 1 loan. He" would give a few examples taken from actual estates to

show the way penalties would work. Take a person or corporation with an income of £268,018. On that income Land and Iqcome Tax would be" payable last "year to the extent of £49,436. -If there had been no contributions to the War Loan of last year a compulsory levy amounting to one and a-half times this amount—namely, £74,454 —would be imposed. '.Then, if there- had been no investment in the present loan, a further penalty of three times the amount of the tax would be exacted—-namely, £148,308. Thus, such person or corporation would have to find £222,762 for forcible investment in the loan for the purposes of carrying on the war. In the case of the income of £34,046, "iast year's taxation would be £5,286. In case of non-investment in last year's and this year's loans respectively, the quotas to be exacted would be £7,229 and £15,858—a total of £23,087. On an income of £3,671, taxable at £453, the figures of the loan quotas would be £679 and/£1,351—a total of £2,030. On an income of £I,OOO, taxable at £39, the penalties would be £53 and £ll7—a total of £175. In addition to these forced contributions to the loan, a defaulter would also have to pay this year double his Land and Income Tax. A very complicated part of the Bill, the Minister continued, dealt with brewers' licenses. He wished tq warn the House that if an attempt were made on.this Bill to attack the licensing legislation generally he would feel it his duty to ask the House to strike out these provisions. Mr M'Combs: The gag! Sir Joseph Ward: There is no gag about it. Mr M'Combs : Why should members be threatened '! Sir Joseph Ward: "I have not tho slightest intention of threatening anybody." This was a matter which had to be placed beyond all possibility of abuse. This Bill contained nothing in tho way of amendment of the licensing laws. It dealt chiefly with brewers' licenses—a very delicate subject. It was proposed to abolish tho old taxes and to establish new ones. Provision was .made for an increase of Is per gallon on spirituous perfumes and coloring and flavoring substances made in New Zealand warehouses. There would also be an increase in the tax on New Zealand-made beer. Accord-

ing to the system of taxation on gravity, the minimum tax would be 5 12-16 d, and the maximum tax 6d per gallon. Simply, the effect of the amendment was to increase the Beer Tax by Id per gallon. Much greater power "of control over holders of brewers' licenses was also provided for. Another important provision was that securities held by banks against money advanced to clients to invest in the War Loan could be used by the banks as security against their note issue. ' It was possible that very large advances might bo made by the bank;-, and the Government must be careful tiiat they did not any restrictions un such transitions. Notes so secured would bo-legal tender for five years after the war. It was absolutely necessary to make everything strong and safe. The whole of the money needed from now on until some time after the war was ended must be raised in this country, and it would be very unwise if by legislation they could strengthen the avenues through" which money could be obtained, and prevent dislocation, they did not do so. The Bill was read a first time, and it was agreed to commence the debate on the second reading .on Thursday afternoon.