TAXATION.

Lyttelton Times, Volume CXVIII, Issue 18574, 29 November 1920, Page 6

TAXATION.

CHAMBERS OP COMMERCE REPRESENTATIONS. DEPUTATION TO MINISTERS. Many of the matters discussed by the Chambers of Commerce Conference at Wellington were placed before the Prime Minister (Mr Massey) and the Minister of Industries and Commerce (Mr Lee) on Friday by a deputation representing the conference, states the " Dominion."

Mr W. Gow was the chief speaker, and he referred at length to taxation. oversca!Ttrade, 4 cargo pillaging and other matters. He presented to the Ministers resolutions adopted by the conference. Mr Gow urged the importance of arranging an improved trade commissioner service, and Baid it would pay New Zealand to spend money on establishing now trade connections and improving old marketsMr W. M. Tyers referred to taxation matters. The conference believed that a royal commission should study matters of taxation. The present system was having the effect of increasing the cost of living and strangling production and enterprise. He urged that all trading departments of the Government ana local authorities should pay taxation and make " reasonable profits for services rendered " in order that they might be on the same footing as private concerns. Mr Tyers suggested that the payment of income tax in instalments should be, permitted. The traders were finding themselves short of cash, owing in part to unexpectedly heavy deliveries of imported goodß, and they were being required at the same time to find money for the Government loans. The English law permitted tho payment of income tax in two equal instalments on January 31 and July 81.

' Mr J- T. Martin referred to he need of improved trade relations with Australia. The Dominion had lost over £400,000 this year owing to the Australian embargo against potatoes and grain. New Zealand did a big trade with the Commonwealth, and was in a good position to negotiate for improved conditions. He thought that New Zealand ought to have a trade commissioner of high standing in Australia, as well as in Canada and the United States. The Americans were reported to be considering the ndvisabihty" of shutting out New Zealand meat. Trade commissioners were required on the spot in order that embargoes affecting the trade of the Dominion might not come into operation without notice or disoussion, to tho detriment of this- conntry's trade. New Zealand needed all the markets it could reach, and ought to be sending out efficient and highlytrained representatives.

TAXATION MATTERS. The Prime Minister, in reply, referred first to taxation matters. He said that the suggested appointment of a- pommission io investigate the Dominion's taxation system seemed at first to be attractive. But he was less attracted after considering the proposal with his officers. The first difficulty would be to find suitable commissioners ,who must be men of wide experience and knowledge without a bias in any particular direction. Then the commission would have to take evidence, and ho believed that the evidenoe that would be given by the various interests could be written quite confidently in advance, since tho matter had been discussed very often already. He indicated that his own idea was to refer the new Customs tariff, after it had been framed, to the Finance Committee of the House of Representatives, which would be able to take evidencp and make suggestions. Ho had considered the taxation of the trading departments of local authorities when the new land and income taxes were being framed, and he had decided that there was practically nothing to be taxed. The Wellington and Auckland tramways, for example, were not making any profits. The State Departments that did make profits, euch as the State Insurance Department and the Public Trust Office, wore being required to pay taxation.

Company taxation, added the Prime Minister, was one of the knottiest problems that the Government had to face. It had been under discussion ever since ho entered politics. The custom all tho time had been to place the taxation on .the companies, not on the individual shareholders. He had looked into the matter recently with the heads of the Departments concerned, and had decided that it would be quite impossible to provide the amount of money that the Treasury required by any other method. Mr Gow: It is unfair, all the same. Mr Massey: "You cannot get me to admit that. It is a question of expediency. Even chambers of commerce have to consider expediency sometimes." He mentioned that provision had been made for exemption from debenture tax in the cases of persons whose incomes did not exceed £3OO a year. The Prime Minister stated that he had already given consideration to the suggestion tliat payers of income tax should be allowed to make their annual payment in two instalments. The change of system woulld involvo increased work in the Department, and some increase of staff, but on the other hand it might enable the Government to avoid issuing interest-bearing Treasury bills late in the year, by bringing in some of that income tax at that time. The matter was still under consideration.

TARIFF REVISION. The revision of the tariff was to be undertaken by Parliament in the next session. This was not a task to be undertaken lightly. A revision of the tariff was the biggest job that Parliament had to undertake, and ho anticipated that some of the chief officers of the Department would be busy from the beginning of the year < until the meeting of the Hou6o making the necessary preparations. The old question of Free-trade versus protection was sure to be raised. The deputation had suggested the appointment of a commission. He remembered that a commission had presented! a report to Parliament when the tariff was being revised soon after his first election to the House, and the members had paid no attention to the report at all. The tariff that he wished to see agreed to would be an extension of Imperial preference. The communities within the British Empire ought to be helping one another and extending tariff advantages *o one another. Ho was willing nt any time to negotiate a reciprocal tariff with Australia, and he agreed that in such a tariff there should not be any discrimination against Britain.

The. appointment of trade commissioners to represent New Zealand abroad had been mentioned. This matter had been receiving attention, and he could say that he had his suspicions with regard to the United: States. It iras impossible at present to say what the policv of the United States was going to be, and until the policy was defined it would not bo wise to make any arrangements for trade representation. If commissioners were sent abroad, they certainly would have to be paid well- Men of the type required could make their thousands a year in New Zealand, and 1 thev could not be expected to go abroad on the country's business at a loss. Ho thought that the arrangements already made for the representation of New Zealand in Australia could bo improved. The Dominion's chief market, in any case, would continue to bo Britain, and his own idea was that New Zealand should have a commercial agent, on salarv.or commission, in each of the important British towns. '