INCREASED NOTE TAX

Hawera Star, Volume L, 25 September 1930, Page 4

INCREASED NOTE TAX

ATTITUDE OF THE BANKS

AN INEQUITABLE BURDEN

(By Telegraph—Press Association.) WELLINGTON, Sept. 24.

Sir Henry Buckleton, general manager ef tire Bank of New Zealand, has sent the following letter to the actingPrime Minister (Hon. E. A. Ransom), concerning the banks’ attitude to the increase in the note tax: — “In view of statements made by some members regarding the attitude of the banks in not themselves shouldering to the full the increase in the note tax, may I by way of correction point out: (l 1 ) That the banks are for income tax purposes already inequitably taxed on an unscientific and arbitrary basis, imposed on no other company, which assumes a fixed profit, even though its business might be actually run at a loss. Under this inequitable system this bank alone will pay this year £58,841 over aiiu above the assessment if made in the ordinary way were it merely a limited company. “(2) That the bank has no intention of passing on the increase of 10 per cent, in income tax to which all taxpayers are equally subjected, notwithstanding the untenable basis of the taxation previously referred to. This 10 per cent, increase amounts te £17,805.

“(3) That the increased note tax dates from July I last, while the charge for keeping accounts dates from October 1 next. The increased tax for this period, which represents to this bank £13,500, is not being passed on. “,(4) That two estimate this bank’s increase in note tax will not be less than £54,000 per annum, whereas the number of accounts of the public kept by us liable to the increased charge is under 85,000, representing at 10s £42,500.

* ‘ (5) That as this bank is probably doing half the banking business of the Dominion it can reasonably be assumed that .the total number of accounts assessable by the combined banks is approximately 170,000 to 200,000, and not the wild conjecture of one member, 400,000 to 500,000. “ (0) May I further state that rather less than one-half of this bank’s profits last year were earned inside the Dominion, and of the New Zealandearned profit £152,602 was not taxable, being interest on our holdings of ‘tax free’ 44 per cent, war bonds. The sum of £33,050 was also exempt from taxation, being the bank’s contribution to its officers’ pension fund and to widows.

“To clarify the position may I ask you to bo good enough to' take the earliest opportunity of submitting to the House the facts as herein set out, and should honourable members care to question, mo on the subject generally I am at their service.”