TAXING LAWS

Gisborne Times, Volume LIX, Issue 9574, 27 July 1923, Page 5

TAXING LAWS

AMENDING AND CONSOLIDATING BILL. INCOME TAX ON LAND TO BE ABOLISHED. PEN ALLIES - REDUCED. WELLINGTON, July 26. A Land and Income Tax Bill, which was introduced by the Prime Minister to-day and referred to the Public Accounts Committee, is almost entirely a consolidating measure. Three new features were, however, outlined by Air. Massey. The most important of these is that the income derived by any owner of land in respect of the rent thereof or the profits derived from the direct use or cultivation thereof shall be exempt from tax, save that this exemption shall not apply with respect to any profits or gams derived from the extraction, removal or sale of minerals, timber or flax whether by the owner of land or any other persons, provided that in the case of profits or gains derived as aforesaid from the removal or sale of timber or coal a deduction shall be allowed equal to the cost of the timber or coal removed or sold by the taxpayer during the income year, nor shall it apply to the profits or gains derived from the business of dealing in live stock, meat, butter, cheese, or wool or in grain, fruit, flax or other crops, being the natural products of land carried on by any persons other than the owner of ether land which, being used for the purposes of the said business is not in itself sufficient for the full sustenance of such live stock or production of such other products, then the Commissioner shall assess for income tax only the profits derived from dealing in so much of the above named live stock or products as is in excess of the capacity of the said land to fully sustain or produce. Clause 91, regarding special provisions wi’th respect to the income of hanking companies, has been altered to restore m its entirety to the former Jaw as to the mode of computing; the taxable income of banking companies. Under recent legislation, income derived by banking companies from debentures was separately assessed and the debentures held by a bank were excluded (for the purposes of income tax) in the computation of its assets and liabilities. ■ This alteration of the law has led to certain anomalies as between the several hanks carrying on business in New Zealand and it is, accordingly, considered advisable to restore to the former law.

The (Prime Minister explained that foreign banks operating in New Zealand were, in this respect, at present in a better position than the banks of the country, such as the Bank of New Zealand. Another alteration of some importance is contemplated in regard to the penalties for the late payment of tax. Section 28 of the 1920 Act provided for an additional tax as a penalty for late payment computed at the rates of o per cent., per cent., or 10 per cent., according to the length of time the tax was overdue. This Bill piovides for a uniform rate of 5 p & r cent. It has been found in practice that the varying rate produced cases of hardship and that the additional amount of revenue received did not compensate for the additional labor involved in its collection. Air. Alassey said he had talked the matter over with the head of the Tax Department, who said this would be a much more satisfactory provision. The Bill has 177 clauses and repeals or amends no fewer than 24 other enactments dating back to 1908. Special.