INCOME TAX.

Evening Star, Issue 16782, 10 July 1918, Page 8

INCOME TAX.

TO THE KPITOII. Sir.—ln your issue ot Saturday there appeared an item from your correspondent of Wellington in regard to Income Tax. (induction from dividends. It stated thut_thi> Commissioner of Taxes hj.d circularised public companies requesi-iiis a, return of the dividends paid to individual*. Your cmrespondent stated that this was £or the purpose of devising some means of reditu for those shareholders who \v*>re in receipt uf only small income?, that should not bo called on to pay incomes tax. It remains to be seen if there is any foundation for the redress business. The Government don't usnally go on a Quixotic knight-errant quest of distressed taxpayers, and possibly axe ont for more blood. Your \tf\n fiotu Wellington states that the rebate offend to shareholders of small incomes, under last year's Finance Act, was not beiiitaken advantage of extensively. If inquiry is made as to how these little folk ;ae. treated when they do apply for this rebate it will be found that the bread promised by Sir Joseph Ward turns out to bo a atone. When the Act was before the Hoasa the Minister of Finance " mentioned • that reasonable provision would ue mad a la *lie Bill to meet the hardships of small shareholders in companies who might have |» pay 7s 6d in the £. Small shareholders

would not require to do that. He thought the House would be satisfied with the provisions of the Bill." I have quoted from his speech as reported. Well, now. the writer is a shareholder in a certain company that paid a 5 per cent, dividend for the last year. It is a class of business that should give a return of at least 8 or 10 per cent., both on account of its risks and from the fact that its life is limited. The secretary of this company states: "I do not think there can be 'the slightest doubt that the company -would have paid a larger dividend this* year if it had not had to meet such a heavy butden of taxation." The writer being in receipt of mi income considerably below what is taxable, made application for the promised relief. All the forms required ny law were properly tilled and forwarder 'in Wellington. After the lapse of three mouths he received the following: —'" I have to acknowledge receipt of your letter nt 16th March last, and, in reply. to say that after full consideration I do not consider the payment of tax by the ! company has reduced the rate of dividend, and therefore your application for refund is not entertained." Now. no doubt the Commissioner lias a difficult role fo .play: but is he holding the balance evenly between the Uovernmi nt and the people'.' YV;>.- it dignilied on the part of the Com-nns-M'.ie: ': Was it showing a readiness and a willingness to comph v. ith the intention of the Act to give relief to the overburdened individual? Was it just? Tt was quite t"uc that the payment of 7s 6d in the £ b\ the company as tax had not reduced the inte or dividend, because this company for \euis had paid no dividend, and for the last \eayor two had not paid more than 5 per cent., but the fact remains that the heavy war tax paid by the company !e.-t \ ear prevented it pacing more than 5 per tun., and one .shareholder at least has In en compelled to pay income tax, though in receipt of an income very much U-ltm what is taxable. That, the Act does not piovide for the full return of the la.\ to the man of small income. Lilt only up to 6 per cent, on the amount paid up on his >iiares is quite under-toed. The Act not only gives lcli-.f to people of small incomes, but actually allows rebates to those in receipt or inn nv- up to £ICO per yea:-. I'lto writer is not of the latter.— I am. <?te.. Equity. July 3.