DUTY ON ORDERS.

Hawera Star, Volume XLVI, 11 October 1926, Page 7

DUTY ON ORDERS.

CHARGES TO DAIRYMEN

CRITICISED BY CHAMBER OF COMMERCE.

The stump duty charged in respect of orders given by milk against accounts with dairy companies, authorising the payment of stipulated amounts to the holders, formed the subject of considerable criticism at the annual meeting of the Hawera Chamber

of Commerce on Friday evening, when a report submitted by the Legislation Committee was under review.

The report, presented by Messrs E C. Fletcher, E. S. R. Dale «nd C. Freyberg, stated that, as the result oi efforts made by Mr H. G. Dickie, M.P., a clause was added to the Stamp Duties Amendment Act, 1926. which, in effect, made the duty twopence on milk orders of under £2O. In *ll other respects, continued the report, the duty stood as originally provided for in the Stamp Duties Act, 1923, as amended by the Act of 1924, vrz., 5s for every £IOO or fractional part of £IOO, .with a maximum of 12s 6d. Mr F. C. .Spratt, speaking to the re-, port, suggested that the matter- be le ferred hack to the committee for further consideration. He considered that the. alteration made last session, was practically useless —at any rate from the point of view of suppliers ,to dairy factories, who financed to a large extent on milk cheques. He pointed out that before 1923 such orders were -sub-

ject only to a duty of 2d, irrespective of the amount. They wer e treated in the same way «s cheques-and “on demand” promissory notes, but- in 1923 the duty was increased to os for every ,£IOO or part of that amount. As the result of protests, the duty was altered in 1924 so as to provide that, on, transfers in

respect of money payable for the ,supply of milk, etc., to a dairy factory, it should be limited to 12s 6d. The most recent amendment was as indicated in the report. In this respect Mr Spratt pointed; out that the effect of the legislation was to impose a stamp duty on borrowers—the class- of

people least able to afford it—and was contrary to the. general principles of taxation, which had been recognised in the repeal of the special wartime duty of os per £IOO on mortgages. Secondly. the alterations of 1924 and 1926. applied only to dairy factory suppliers, and there 1 were a'good many small contractors’ in different kinds of businesses who still felt the- previous burden. In his opinion it was evident that the provisions of the Act in 1923' were taken from the English legislation, and were copied in ignorance of the effect on borrowing in New Zealand. The effect was simply to treat such, orders as actual assignments or transfers of property, whereas in reality they were only intended to he available as security for moneys lent.

Afr H. G. Dickie, M.P.. urged that, as far as it went, the amendment of 1926 had certainly proved useful. Whereas previously air order for the smallest amounts was subject to 5s duty, those for amounts not exceeding £2O were now subject to 2d only. He agreed with Mr Spratt, however, that the- extra tax for larger amounts should be dispensed with and the orders treated as cheques, it- being unreasonable that a farmer having £IOO to his credit with a : dairy company should have to nay 5 s on what amounted practically to a cheque when, if he could have the sum transferred to a hanking account, its withdrawal by rhenne would cost only 2d. The legal, difficulty was that the orders were regarded as assignments of money on which 5s per cent, or portion of £IOO, was chargeable. He believed that further action would he taken, and in the meantime a considerable concession, as indicated, had been granted. Mr R. A. Douglas stressed the point that in his banking experience he found the stamp dutv was a very heavy burden 1 on milk suppliers and on people decline with orders in other lines. Mv F. W. Horner pointed, out that a- man who raised £20.000 on a land mortgage paid only 2s 6d stamo duty, whereas a' dairy supplier, giving an order as security for £3OO. paid 12s 6d. The report was referred hack to the Legislative Committee of the ehambei for further consideration.