TAXATION

Hawera Star, Volume XLVIII, 25 September 1924, Page 5

TAXATION

BILL AIMS AT REDUCTION

LAND TAX TO BE MODIFIED

PRO VISIONS OF BILL EXPLAINED

BY CABLE-PRESS'ASSOCIATION-COPYRIGHT WELLINGTON, Sept. 24. The Land and Income Tax BiU was introduced in the House to-night by the Premier (Mr:W. P. Massey). Mr Massey said the principles of the Bill were all in the direction of a reduction of taxation., In support of this policy he quoted some observations of Mr Andrew Mellon (Minister for Finance in the United States), who con-, demned excessive taxation as injurious to the progress of any equntry and Mr Mellon was a man' of world-wide reputation. He next quoted "the opinion of the Taxation Commission, who recommended .the abolition of the landtax, which he did not favour, but who also pointed out that high taxation must inevitably drive capital away. He proposed _to a retain the land tax with modifications. The graduated - land tax must also stand for the’ present. However, he was doing his bestto give concessions to the small, man. The Premier then proceeded to point out that the recent deductions in taxation were in land tax £139,843, while the remission of income tax amounted to £932,/28. He also mentioned that 1 on March 21 last the arrears'of' land tax amounted to £337,921, and 1 income tax £398,601. This was: a most. important phase of ... taxation, . because many men who supposedly had money to burn could not find sufficient cash to pay their land tax. He had received most appealing letters during’ the past month, but these had been referred to the .permanent head of the department, who was \a v most reasonable man’ and who never failed to do justice in cases of hardship. -v Mr Massey proceeded to describe the various provisions of-the Bill. He shid there was a machinery amendment to section 08, under which two or, moT© companies with substantially the- same shareholders were to be deemed a single company. Section 71 is amended to provide for the lessee of. native and (instead of the “occupier”) being liable for the payment of'land tax on behalf of the native owner. The special exemptions in section 77 of the 1923 Act in respect of insurance premium's are to be calculated with respect to assessable income. ; Incoihe ■ 1 derived from pensions granted in Great Britain or within the British Dominions in respect .to the Great War are' added - to the list of exemptions from taxation, lhe term “all profits or gains” derived from any business which is.the basis of assessable income under section 77 is amended by the ’ 'inclusion'' of any i in-* crease in value of stock in hand at the time of the transfer or sale of the business or on the reconstruction of the company. Where a bonus, gratuity or retiring allowance, is paid in a lump sum only 5 per cent of such sum shaft be deemed to be income in resjiect of employees of a local authority or uubhc authority other than the . Public Trust or the State Advances Department. Income derived from lands held as small grazing runs or for pastoral purposes, is to be assessable'for income tax. The term “capital value”, is def fined for the purposes of section 83 of the principal ; Act, relating; specif exemptions in respect of ■ income deprived from the use of land in thl Valuation of Land Act, 1908,. as iif. eluding timber or flax' other than root* of flax plants. The final clause in the Bill provided that where land is purchased. on which land tax is owing the commissioner niqst register a’ • charge against the land within a limited time. He was satisfied .the Bill was an improvement on the present law/ its main pimciple being that every one , must pay taxation according to their ability b° pay. . j; The. leader of the Opposition (Mr TM- Wilford) said his difficulty in dealing with the Government’s - taxation' proposals was that no on© could even tell what those’proposals were. They .were always put before the House in such a piecemeal form that it was impossible to form any idea of what their effect was to be. He was satisfied that the taxation on. higher incomes was not sufficient, and he anticipated that men with big incomes were. going *to have a good time under this Bill. The gradations should be steeper iq land tax, especially where the' growth 5 of towns and cities had added enormous values to lands, as in the case of the Hutt \ alley. He asked the Premier to state definitely what the total reductions in land and income taxes were to be this year, because it looked as if juggling was going on in connection with the reductions, proposed in the first- Bill and - those proposed" in this Bill. As the matter stood it was exceedingly difficult to ascertain what the position was, and therefore when a proposal was made by the Government to reduce taxation by £IOO,OOO no one could say whether the financial position of the country warranted this being done. He was altogether opposed to excessive taxation, and this was the case with some companies. If, however, relief was to be given the smaller men, then higher incomes should lie made to pay more. . 'i he Hon. Vy. Downie .Stewart said the Bill meant art all-round percentage reduction on incomes. It would take some time to adjust the incidence, of taxation as recommended by the Taxation Commission, and therefore ' the only immediate remedy was ah allround reduction of income tax as the Government proposed. .; . Mr Massey. In reply, defended the findings of the Taxation Commission, whose members were well informed on the subject and had done exceedingly good work. He never intended to be bound to accept all their recommendations. If he agreed with them-" he would take them up, but not otherwise. Replying to Mr Holland’s.. argument that the average relief would amount to only about £1 pier taxpayer, he pointed out that small landholders did not come into the calculation at all, because it only applied to men with mortgages ranging from £4OO0 1 to £ip,ooo. and to them the relief would be considerable. Referring to the alleged discrimination against holders of small grazing runs aiid ' pastoral licenses, he explained that by an omission in the Act of. last vear these people had been left out. 'That was accidental, and the proposal in this Bill was simply to put them' back to the position they were in prior to the war. The Bill was read a second time'and referred to the Public Accounts Committee.