Manawatu Evening Standard. FRIDAY, OCTOBER 4, 1940. THE EXCESS PROFITS TAX.

Manawatu Standard, Volume LX, Issue 263, 4 October 1940, Page 6

Manawatu Evening Standard. FRIDAY, OCTOBER 4, 1940. THE EXCESS PROFITS TAX.

The Government’s Excess Profits Tax Bill made its appearance in the House of Representatives yesterday afternoon, and in order to give members the opportunity to fully study the lengthy memorandum which accompanied it the second reading debate has been set down for next Tuesday. This procedure is. the correct course to adopt, for the matter is one that should have the very earnest consideration of all members ;of Parliament. Briefly the Government has, in its Bill, set a standard income and the individual taxpayer, apart from those earning salaries and wages, has three sums from which to choose his standard. On the other hand a company has two. The former may declare his standard income either £500; a sum 'equal to liis highest assessable income during the years ended on March 31, 1937, 1938, and 1939 or their average plus 30 per cent., whichever is the less; or a sum equal to 6 per cent, of the value of the assets lie uses in producing his income plus from £SOO to £IOOO for personal exertion. The company can accept the individual taxpayer’s second choice, or a sum to provide 6 per cent, on its capital after income tax has been paid at the 1940 rate, excluding the 15 per cent, war tax. There is provision for special cases where the standard income cannot be assessed by this procedure, and a special committee will_ be appointed to investigate objections where it is considered by the taxpayer < that the sum claimed is not excess profits, llie Government will divide any excess profits on the basis of 60 and 40 per cent., once the residue has been found after payment of income tax, social security charge, and the national security tax. It is the Minister’s hope that he will get nothing from this taxation which becomes payable in 1942, and everyone will trust that lie will be so rewarded, for there is not a single person m this country who wishes to make profit from the war. On the face of everything the procedure appears to be quite simple. lliis fis the Minister’s claim also, and in his own words the Commissioner of Taxes assesses the excess profit; tlie committee will hear any appeals and will be limited in two ways —it cannot assess the excess profit lower than the figure the taxpayer admits, or higher than the Commissioner of Taxes claims, and will have no power to interfere with the ordinary income tax assessments. It is the Bill’s simplicity that may make it suspect by many taxpayers, who will have the opportunity, with the public as a whole, to follow the course of the debate next week. Already the country is suffering from an' overdose of

taxation and industry is being hampered widely by its harsh restrictions. This Bill adds one more, means of taxing people to the country’s already lengthy list, and like the others when once passed none can say when it will be lifted.