ARREARS OF TAXATION.

Manawatu Standard, Volume LVIII, Issue 245, 14 September 1938, Page 6

ARREARS OF TAXATION.

POWERS OF COLLECTION. MR COATES CRITICAL. WELLINGTON, Sept. 14. Criticism of the power given to the Commmissioner of Taxes under a special section in the Finance Bill to collect arrears of land and income tax resulting from retrospective changes in the law was voiced by the Rt. Hon. J. G. Coates during the second reading debate on the Bill in the House of Representatives last night. “I do not know whether the Minister of Finance realises the power which he is giving to the Commissioner,’’ said Mr Coates. “The Minister suggests that the latest amendment refers only to companies which have moved their balance dates forward from March 31 in any one year. Be that as it may, the effect of the clause is far-reaching. Notwithstanding any Act previously passed by Parliament, the Commissioner can go back as far as lie likes, and collect arrears of tax under the law as it is now amended.” The Minister of Finance (Hon. W. Nash): Hear, hear. Mr Coate3: The Minister agrees ? Mr Nash: We will find out wliat the taxpayer should have paid no matter how far we go back. “The amendment refers to individuals.as well as companies,” said j Mr Coates. “The Commissioner can'

pry into the accounts of every taxpayer for the past 40 or 60 years. The Minister is looking for extra revenue from taxation and the Commissioner is being given complete power to - over-ride the law.” Mr W. P. Endean: That is monstrous. Mr Coates: If it’s not dictatorship, I don’t know what is. People were entitled to some security under the law, Mr Coates continued. In spite of what the law might have been in the past, the Commissioner was being given power to go back and assess past incomes and charge additional tax on them if, in his opinion, taxation had been evaded. Such a provision cut the ground away from all previous legislation. “Can anyone say that commissioners in the past have shown favouritism and allowed evasion,” Mr Coates asked. “It is not our duty to deal with cases which have slipped through the net. If the law is faulty, it is only right that we should prevent future evasions, but we have no right to make a retrospective application. What is actually in the back of the .Minister’s mind is the necessity for grabbing all the revenue he can this year in order to square his accounts.” WIDESPREAD CONCERN.

Mr Coates said tlmt when the clause was reached in Committee he proposed to move an amendment to have it referred back to the Government. The proposals as they stood at present would cause widespread concern and lack of confidence in taxation methods. The Government would be well advised to set up a commission, consisting of a Judge or a Magistrate and two former Commisisoners of Taxes, and allow them to investigate the whole matter.

Mr Nash: The amendment applies only to cases where there have been changes in balance dates. Mr Coates: A great many farmers and country people have changed their balance dates in keeping with seasonal operations. |

The Attorney-General (Hon. H. G. R. Mason) : Seasons do not change. “My honourable friend overlooks the fact that under this clause it is possible to go back* any number of years,” said Mr Coates. “The whole thing is iniquitous from start to finish.”