Taxation Reduced

Hawke's Bay Tribune, Volume XII, Issue 243, 27 September 1922, Page 4

Taxation Reduced

SUPER-TAX ON INCOMES. CUT OUT ALTOGETHER 10 PER CENT. LESS SUPER TAX ON LAND. (Special to “Tribune.”) Wellington. Sept. 17. Proposals for the reduction of taxation are contained in the Land and Income Tax Amendment Bill, introduced in the Roues yesterday afternoon. The Government proposes to remove altogether the super-tax on incomes and to reduce to 10 per cent, the super-tax on land. It is estimated that the concessions mean a loss of £929,100 in revenue, but the Minister for Finance considers, having in mind the improvement in the finances of the country, he is warranted in taking somewhat of a risk and trusting to the Industry of the people. Asked by the Leader of the Opposition to explain some of the main features of the bill, the Prime Minister said the first clause of importance referred to land tax. It would be remembered that earlier in the session' when it was necessary to give the Commissioner of Taxes authority to collect land tax, Parliament reduced the super-tax on land from 33 1-3 per cent, to 20 per cent. It was originally 50 per cent. He was proposing now to reduce the amount by a further 10 per cent., leaving 10 per cent, as super land tax. He was doing this because the financial outlook had improved somewhat. “I know 1 am taking a risk,’\ he added, “but in the circumstances it is proper to take the risk and trust to the industry of the people.” The leader of the Opposition: We moved to take it all off uhder £20,000. Mr. Massey: That is quite a different thing, but 1 would have thought the hon. member would have forgotten about it, for I never knew another more unstatesmanlike than the proposal to reduce everything under £20.000 without taking into account obligations. Mr. Young (Waikato): It was good electioneering. Mr. Massey: “If you and I went on the public platform and made that proposal. we would be laughed at all over the country. Mr. Wiliord: You will be in any case. Mr. Massey said another important clause dealt with native lands. He explained that it sometimes occurred that the land tax was greater than the amount of rental received, which was very unfair. The Government therefore proposed that the amount of the tax should not in any instance exceed 25 per cent, of the rental. Coming to income tax, continued Mr. Massey, we are reducing the amount by knocking off super-tax altogether. There was 20 per cent, of it left, and we are knocking it all off, and that will be a very considerable reduction. Taking land and income tax together, the total involved is £929,100. The Hon. Eanan: Loss? Mr. Holland (Buller): How are you going to make it up? Mr. Massey: 1 have not forbotten that during the first five months of the current financial year we made a saving of over £2,000,000 in expenditure, and 1 hope the amount l>eing saved will go on Mr. Wiliord asked whether Mr. Massey meant a saving, or simply that the expenditure was less by the amount quoted this year. Mr Massey: We expended £2,100,000 less than last year. Mr. Wiiford: That is not saving. Mr. Massey: Well, then 1 don’t know what saving is. Answering further interjections, Mr. Massey said that if the country has to continue under the enormous load of land and income tax, it would be landed into disaster. They were killing industry by asking the people to pay too much taxation. The reason for there being so many unemployed was partly that people in the habit of employing men in the past had not Iwoo able to do so because they had not the money available. The Hon. Hanan: When will this commence ? • Mr. Maasey-: This financial year. Further interjections from the Labour benches caused Mr. Massey to retort : “Very well, vote against the bill.” He went on to say that one of the causes of the fall of four millions in sheep flocks of New Zealand in the last four years was the fact that taxation liad compelled sheepowner.s to sell their flock sheep for fats. The bill contained an amendment in the matter of exemptions so that a man charged with the maintenance of grandchildren might benefit by the al lowance made to parents. Timber in the past for taxation purposes had been regarded as a wasting anet, bnt in the taxation of coal companies there had lieen no allowance made for the coal mined. The bill proposed that coal should be treated in the same way as timber. Hon. Hanan: Does the bill touch companies at all? Mr. Massey: it doesn’t deal with companies as companies, but they will share* in the general induction. OTHER CONCESSIVE CLAUSES. HISSES SET OFF AGAINST PROFITS. The bill contained a number of clauses which Mr Massey did not mention in the brief summary he gave the House. One of the most important oi these is that to enable losses incurred in business in any year to be set off against the profits in succeeding years. This will not come into effect until Ist April, 1923. The clause reads:— “Notwithstanding anything to the contrary in the principal Act, any taxpayer who satisfies the Commissioner that he had in any year incurred a loss in any business carried on by him shall be entitled to claim that such loss be carried forward and, so far as may be, deducted from or set against his assessable income for the three following years.” Allied to this is a. proposal giving facilities for losses incurred by a taxpayer in one business to lie set off against the profit made by the same taxpayer in another business. EXEMPTION OF SOLDIERS’ PENSIONS. Another clause meets the demand of returned soldiers that war pensions shall not lie liable to income tax. Any company resident ’n New Zealand and carrying on business exclusively in any of the islands of the Pacific, not being British possessions, is to be assessulJe for income tax only in respect of such part of the income as is received in New Zealand. HUSBAND’S AND WIFE’S BUSINESS PROFITS. Finally, it >s provided that a husband and wife, carrying on business together. shall net be deemed to lapartners unless thev are in fact carrying on business under a deed partnership.