UNJUST ANOMALY

Hawke's Bay Tribune, Volume XXIV, Issue 83, 20 March 1934, Page 8

UNJUST ANOMALY

UNEMPLOYMENT TAX No Allowance for Losses HARDSHIP ON FARMERS The following resolution pointing out an anomaly between the law governing income tax and unemployment tax obligations, and describing the anomaly as an injustice, was adopted by the Hastings Chamber of Commerce last evening on the motion of Mr. J. S. Butler: “This Chamber is of opinion that the right of a taxpayer to carry forward losses as an offset to future profits should apply to unemployment tax as well as to income tax, and considers that a grave injustice will be inflicted on taxpayers generally, and the farming community in particular, if this is uot conceded. Many are heavily in urrear with rates, land tax and mortgage interest, and the interests of the community require that these rather than uiiempb iient tax should be the first charge u.. any profits earned. The Chamber commends this matter to the attention of the council of the Associated Chambers.” Speaking to his motion, Mr Butler said that the matter affected all taxpayers, and especially farmers. So far as income-tax was concerned, a taxpayer was allowed to carry forward a loss for as long a period as three years.

The Commissioner of Unemployment, on the other hand, had ruled that a similar concession did not apply to unemployment tax, and therefore, if a man made a loss of £2OOO this year and a profit of £lOOO next year, he still had to pay unemployment tax on £lOOO. Yet the man had not made a profit at all; he had merely made up a part of the previous year’s loss. HARSH EFFECT. “This is an injustice that is affecting the community very harshly to-day,” continued Mr Butler, “and it will be a etill heavier burden this year.” Many farmers were much in arrear with such payments as rates, land tax, and especially mortgage interest. It was important in the interests of the country that the farmers should be enabled to rid themselves of those arrears, rather than that they should be faced with the payment of unemployment tax. “As a matter of simple equity,” said Mr Butler, “any taxpayer is entitled to consideration in this respect. The sooner the farming industry gets on to a stable footing, the better for the country as a whole.” Mr Butler went on to say that he had written to Mr H. M. Campbell, M.P., on the subject, and Mr Campbell referred the matter to the Unemployment Board. The board, however, had gone no farther than to say that the matter would be considered if any amending legislation were brought down. Also, the matter had been brought to the notice of the Hawke’s Bay branch of the Farmers’ Union, who had referred it to their headquarters. TAXATION PRINCIPLES. The following resolution, also moved by Mr Butler, on behalf of Mr A. C. A. Hyde, was unanimously adopted after a brief discussion. — “This Chamber has considered the circular from the Associated Chambers of Commerce with respect to taxation of mutual trading concerns. It reaffirms its adherence to the principle of a graduated income tax on the income from all sources of each individual, and therefore considers that the present method of taxing incomes derived by building societies is the correct basis and should be applied also to companies. So long as the present system of taxing companies as separate units is in operation, mutual trading, mutual insurance and State and municipal enterprises, cannot fairly expect to be free from taxation to which their comp.etitors are subjected.” Mr J. S. McLeod remarked that the first part of the resolution was exactly in conformity with the findings of the 1924 Royal Commission. That finding was never discussed in the House, as it had been apparently distasteful to the Government of the time.