COMPANY TAXATION

Evening Star, Issue 26030, 19 February 1947, Page 5

COMPANY TAXATION

COMPLETE REVISION URGED MANUFACTURERS’ CASE (P.A.) WELLINGTON, Feb. 18. The New Zealand (Manufacturers’ annual conference decided to endorse its Taxation Committee’s recommendation that its activities should be directed principally towards obtaining a complete revision of the incidence of all taxation and the consolidation of taxation legislation as l'ar as practicable, and as early as possible. It was recommended by the Taxation Committee that immediate attention be given to a review of the graduated scale of company tax, to adjust its incidence, and relieve the crushing burden on companies in the £3,000 to £B,OOO income group. The committee recommended that the simplest way of affecting a reduction of taxation in the first instance would be the removal of the 15 per cent, war surcharge. Mr E. 11. Norman said the committee felt that the present graduated system • imposed a great hardship on a company fighting its way from a profit of £3,000 to its maximum. The depreciation provision of the law was highly complicated, the objection being that expenditure incurred in one year could only he recognised if it was for the benefit of income earned in that year, whereas it was often intended as a “continuous benefit over three or four years. The Commissioner of Taxes had declined to ■ allow the legal costs involved in the formation of a superannuation fund because it was not an expense 'incurred in earning income.

Mr E. Tomkins (Wellington) pointed out' that, as many plants were being used for more than their normal time, a. proportionately increased depreciation should be allowed, It was suggested by Mr I>. O. Whyte, of Wellington, that the federation should press for an original value basis of depreciation, instead of a diminishing value. >

Mr E. T. Allen (Auckland) urged the conference to advocate the removal of the remaining items of the sales tax, which had such an inflationary tendency. If this could be done it would benefit the community as a whole.

Mr Norman, in reply, stated that it was always open to taxpayers to approach the commissioner regarding special plans for depreciation. As for sales tax, it was instituted for a special purpose, and the question of its abolition could be dealt with by a national committee, representative .of wider interests than the manufacturers.