TAX ON SECURITIES

Hawke's Bay Tribune, Volume XXIII, Issue 72, 7 March 1933, Page 11

TAX ON SECURITIES

failure to convert. POST OFFICE CERTIFICATES Wellington, March 6. Provision for the imposition of an interest tax at the rate of 33 1-3 per cent ou Government securities which have not been converted under the New Zealand Debt Conversion Act is contained pi the Finance Bill. It is'further provided that interest tax at the rate of 20 per cent shall be charged on all interest accruing on existing State Advances, Rural Intermediate Credit or Land Settlement Association securities if the place fixed either for payment of interest or repayment of principal as nt April 1, 1933, is in New Zealand or is at any time after that date changed to a place in New Zealand. Although designated as an interest, tax, the impost ou existing State Ad-

vances, Bural Intermediate and Land Settlement Association securities is really the equivalent of that under part 1 of the Local Authorities Interest Reduction and Loans Conversion Bill. It is not possible to bring securities covered by this clause into Government conversion schemes; hence the only way in which a comparable reduction can be effected is by nn interest tax of 20 per cent. POST OFFICE CERTIFICATES. The net amount received by way of interest tax in respect of securities dealt with in tho clause just explained shall be paid to the superintendent of the board or association, as the case may be, after allowing for tho deduction of an amount not exceeding 5 per cent, as the Minister of Finance directs, in respect of administrative expenses.

Provision is made in another clause for the imposition of interest tax on the amount repayable at maturity in respect of existing Post Office investment certificates. The amount payable on each class of certificate is based on a reduction of 20 per cent, in respect of interest accruing from April 1, 1933, to tho date of maturity of tho certificates Tho clause dealing with the collection of interest tax states that, subject to any regulations that may be made, the tax may be deducted f/om interest in respect of which it is payable, or de noted by adhesive stamps which shall bo affixed to the receipt for such inter est and cancelled by the person receiving interest. INCOME TAX POSITION. Special exemption is made for tha purpose of income tax. It is set out that the amount paid by any person as interest tax in any year in respect of interest included in his assessable income shall be deductable by way of special exemption from tho assessable income of such a person for that year. The clause also provides that the amount paid by any banking company as interest tax in any year in respect of interest that is not exempt from income tax shall be deductible from tho taxable income of that company for that year. Another clause provides that the present stamp duty imposed under Part 4 of tho National Expenditure Adjustment Act shall not be payable in respect of any interest on which interest tax under this bill will bo payable. Tho final clause enables tho GovernorGeneral to make regulations which may be found necessary to give full effect to the bill.