WAR TAXATION.

New Zealand Herald, Volume LII, Issue 16035, 29 September 1915, Page 8

WAR TAXATION.

BUDGET MODIFIED.

ONE PER GENT. ON IMPORTS.

HIGHER BEER DUTY.

INCREASED MORTGAGE TAX.

NEW TAX ON BANKS.

CHARGE ON RACING STAKES.

PETROL DUTY ABANDONED.

OTHER ITEMS DROPPED. [BT TELEGRAPH.SPECIAL COBBJESPONDENT.] Wellington, Tuesday. The new Taxation Bill was introduced in the House of Representatives this afternoon by Sir J. Ward, Minister for Finance. Sir Joseph Ward summarised the proposals of the Government, and particularly explained the difference between the provisions of the Bill and the war taxation proposals as set out in the Budget.

The whole discussion of the Budget, said Six J. Ward, had centred practically around two points, the taxes on mineral oik and on beer. The mortgage tax had also been criticised to a lesser extent. In going into the whole matter very fully he had been hopeful that it might have been possible to exclude from the proposals oil and petrol used fox industrial purposes. It was found impossible, however, to earmark any particular oil and place it on the free list. He had realised that for various reasons, with some of which he did not agree, members were averse to the tax on kerosene and petrol. The speeches generally were in favour of increasing the tax on beer. He had recommended his colleagues to substitute for the proposed oil tax a 1 per cent, primage tax on all goods imported into New Zealand. The abandonment of the oil tax meant a loss of £194,000 per annum on the taxation proposals. The proposed 1 per cent, primage tax, based on an annual importation of a value of £20,000,000, would bring £200,000 per annum. The annual importation might, of course, be more or less than that. The proceeds of the primage tax would depend on the total importation. It would be realised that the Government in amending its proposals could not give anything away. Telephone bureau charges, which it had been proposed to increase to 6d, said the Minister, would be allowed to remain at 3d.

With regard to the proposed tax on nonalcoholic beverages it was found difficult to put the proposals into operation this year and it was proposed to appoint a Customs officer with the power of a commissioner to enable him to investigate and report with a view to enabling the tax to be effectively levied.

Another Farthing on Beer. It was proposed to increase the beer tax by another farthing, continued the Minister, and this would increase the extra tax on beer to between £70,000 and £80,000 per annum. The manner of levying the tax would be the same as originallv proposed, that was to say, according to the alcoholic strength of the beverage. He expected that the total extra tax on beer would bring in at least £70,000, and there would be another £7000 or £8000 or more from the increase on stout.

Extra Farthing Mortgage Tax.

To make up the loss in revenue entailed by the alterations in the Bill, it -was necessary to increase the mortgage tax bv id to bring it up to Id. That would bring the proceeds to between £60.000 and £65,000 or more. It was not possible for the Government at a time like the present to go in for a graduated mortgage tax. There was doubt as to what would be the working of such a tax, and the Government could not wait at present for experimental developments. With the time that would be occupied in putting the tax intopperation, it would take the Government all its time to get the proceeds in during the current year at aIL

Income Tax tor Mortgagees. During the financial debate the question of mortgagees not being dealt with for war tax purposes had been referred to. It was intended to meet that difficulty and to nave an income tax applicable to mortgagees so as to ensure their making fheir war contribution to the revenue. °They would be called on to contribute about £50,000. The effect of the alteration would be that mortgages would be assessed in the ordinary way for mortgage tax charged at Id in the £. Later, it would be ascertained what tax would be payable on the interest derived from the mortgage If such income tax was in excess of the land tax, notice would be sent claiming the income tax and showing credit for the amount of land tax paid practically a demand for the difference. The effect would be that income tax would be paid on the interest of the mortgage with a proviso that the tax paid should in no case be less than the amount that would be paid by assessing the capital sum of the mortgage at Id in the £. Mortgages totalling up to approximately £40,000, if the assessable income did not exceed £2000, would pay Id in the £. If it were over that amount a graduated income tax at the rate of Is 8d in the £ and upwards would be paid on the income. That ensured that, while a mortgagee might pass the mortgage tax on to the mortgagor, he could not pass the income tax en. Comparison With Budget. The Minister went on to sav that the difference in the financial proposals as thev %* 4 0rt i h 2*. the BiU «* compared with the Budget forecast, could be summarised as follows :— REMISSION'S FROM -BUDGET PROPOSALS. Tax on oils ... ... mmm 194,000 Telephone fees ... ... *20 000 Non-alcoholic liquors ... 20.000 Farmers' Income tax ... ... 80000 Total remissions ... £314 000 PROPOSED NEW TAXES. One per cent, primage ... 200,000 Earthing mortgage tax ... 65 000 In ™? *** on mortgagees ... 30.000 Additional beer duty ... ... 15 000 Total of new taxes ... £310,000

Income Tax on Large Fanners.

Commenting on these figures, Sir Joseph Ward said it had been found that fewer of the moderate farmers than at first thought would pay income tax. The tax would be borne by the larger farmers. The estimated amount to be derived from farmers* income tax had therefore to be reduced by £80,000. There were other avenues of taxation proceeded the Minister, but these would not be exploited at present. Members should understand that where the proposed taxes were taken off it had to be made up elsewhere. In conclusion, Sir Joseph Ward asked the House to put the new measure through that evening. Haste was necessary because the money was required and a very great amount of Departmental work was necessary before the new taxation could be imposed.

The Minister explained that it was now proposed to make an increase in the tag:

on banks by way of an assessment on the assets and liabilities. As a result of further inquiries made since the Budget -was brought down he was not at all sure that it would be possible to obtain the revenue expected by continuing the note tax proposal as the banks might increase their gold circulation and reduce their note issue. Accordingly by fixing the tax upon income assessed upon the total assets and liabilities and allowing the note tax to remain as it was the Government would for a certainty obtain the increased revenue sought. Another proposal which it was claimed would serve the same end with less trouble to the banks had just been submitted to him by a representative of the bankers, but the matter required careful consideration and he desired that the proposal in the Bill be given legislaI tive authority in the meantime.

Tax on Totalisators. Explaining his proposals later, Sir J. Ward said that in the Budget he had proposed a 2£ per cent, tax on totalisator takings. It had been found to be more practicable to take the amount off individual dividends, and it was now intended to make the following deductions from dividends:On a 2Cte tote, from dividends of £2 10s and under, Is; dividends between £2 10s and £3 10s, tax Is 6d; between £3 10s and £4 10s, tax 2s; for every pound or fraction of one pound over £4 10s, an additional 6d. In the case of a 10s tote the deductions proposed were as follows:—From a dividend of £1 10s or less, tax 6d; between £1 10s and £2 10s, tax le; and after that the same as in the case of the larger tote

In addition, a duty of 1 per cent, is to be imposed upon all stakes won at all race meetings in New Zealand. The racing clubs concerned are made responsible for the collection of these special taxes. Taxation of Brewers.

The Minister said that provision was made for supervision fees to be paid annually in respect of every brewery, computed on the basis of the average number of visits per week paid by a Customs officer to the brewery. In order to make. the brewer pay the cost of collecting the beer tax, brewers' licenses would be issued on the payment of supervision fees. The scale of annual supervision fees was as follows Where an officer is required to visit the brewery on an average of five days per week or more, £75; four days, £60; three days, £45; two days, £30; one day, £15 ; less than one day, £10.

NEW CUSTOMS DUTY.

PRIMAGE IN FORCE TO-DAY.

ONE PER CENT. ON IMPORTS.

GOODS NOW IN BOND EXEMPT. [BY TELEGRAPH. —SPECIAL COBBESPOXDEXT.]

Wellington, Tuesday

The following are the resolutions passed by the House of Representatives this afternoon, on the motion of the Minister for Finance, giving effect to the new Customs duties : —

The resolutions passed on August-26, 1915, relating to duties of Customs and excise are revoked, so far as they relate) to oils, mineral oils, mineral spirits, and refined mineral oils, but shall otherwise remain in full effect.

There shall be levied, collected, and paid upon all goods ' imported on or after September 29, 1915 (with the exceptions hereinafter mentioned), whether otherwise liable to duties of Customs or not, and in addition to any other such duty, a duty of Customs (to be termed primage duty) of one per centum of the value thereof. In the case of goods imported on or after September 29, 1915, and entered for warehousing, primage duty shall be paid at the time of entry. In the case of goods entered for ware-' housing, primage duty shall not be payable on the subsequent entry thereof for home consumption, whether the goods were warehoused before or after the date of these resolutions. The goods mentioned in the schedule hereto shall be exempt from primage duty. These resolutions shall not extend to the importation of goods into the" Cook Islands. The schedule is as follows:— Exemptions from primage duty: Ostrich feathers grown in New Zealand when returned from abroad dressed or dyed, upon evidence being produced to the satisfaction of a collector of Customs as to their previous exportation; articles being exhibits for public display only in public museums, whether purchased under bond or directly imported by ox for presentation to such museums, upon declaration that such goods will not be sold or otherwise disposed of in New Zealand without payment of any duty which may be payable; paintings, statuary, and works of art, whether purchased under bond or directly, imported by or for presentation to any public institution or art association registered as a body corporate, for display in any public park or place, on conditions prescribed by the Minister medals, including only old or second-hand war medals, humane societies' medals, and other similar medals, also old coins; apparatus, appliances, articles, and materials for educational purposes, as may be approved by the Minister and under conditions prescribed by him.; official supplies for Consular offices of countries where a similar exemption exists in favour of British Consuls; passengers' baggage and effects, including only wearing apparel and other personal effects that have been worn or are in use by persons arriving in New Zealand, also implements, instruments, and tools of trade, occupation or employment of such persons, not exceeding tBSO in value; household or other effects, not exceeding £100 in value, which have been in use for 12 months prior to embarkation by the persons or families bringing them to New Zealand, and which are not intended for any other uerson or persons, or for sale ; also, cabin furnishings belonging to such persons, not exceeding in value £10; returned empties which are identified as such to the satisfaction of a collector of Customs ; specie ; fish ova • goods provided for by sections 139, 140' and 141 of the Customs Act, 1913.

DEBATE ON TAXES.

THE BILL CRITICISED.

AMENDMENTS PROPOSED.

COUNTRY MEMBERS PROTEST

[BY TELEGRAPH.—PRESS ASSOCIATION.] Wellington, Tuesday. The House debated the Bill at the evening sitting. On a motion to claim urgency for tie Bill, Mr. J. McCombs (Lyttelton) protested that members had not had sufficient time to peruse the Bill, which had 100 clauses and eight long schedules. Sir J. Ward said that the money proposed to be raised should be available as soon as possible. Urgency -was granted for the BilL Explanations by Minister.

On the second reading, Sir J. Ward explained the Bill in detail clause by clause. It is a complicated measure of a highly-technical nature, with 109 clauses and eight schedules. The bulk of its provisions are on the lines indicated in the Budget, and the alterations were as outlined by the Minister in his speech this afternoon. Speaking with regard to the Customs duties, the Minister said that. from the alterations in connection with bicycles, tricycles, motor-cycles, motorcars, gas and oil engines and accessories, it was estimated that the duty would amount to £45,000 upon a basis of 10 per cent, on British made, 20 per cent on goods made in neutral countries, and 50 per cent, as against enemy couatriesj

The latter tax, of course, would brin* I - no revenue since enemy goods were %ZZ ' • l , now purchased in this country - - •n? duty on spirits used in manufactS" warehouses was brought into thai on spirits for consumotion bv „ " increase of Is in the gallon on the dut^ Provision was made for the impositof a surtax of 50 per cent, on GernsS and enemy goods. vrermajj . An Amendment Announced. Mr. T. Sidey (Dunedin South) «j> " corned a provision which relieved tW - who had entered into contracts whir* ' were affected by the railway rates • *}*' J 3 " 7' u PearCe i?*> co «id. not understand why an additional tax shouH ' - not have been put on sugar. He totaD, disagreed with the rearrangement of th* ' mortgage tax, which was no improvement on the old system. The mortgage tax '- should be abolished and the proceed, from mortgages should be taxed through the income tax. When in Committee he V/" proposed to move an amendment to reduca the beer duty, with a view to increasing the duty to 6d per gallon. The brewer* held a huge monopoly, and there was nothing in the Dominion that could better stand taxation. His proposal would pro duce £25,000 per annum. He asked th« National Government not to follow party tactics, but allow the House to vote on the question as it pleased. Mr. McCombs said the primage duty was sure to be passed on and would oaf* result in the increased cost of living. Ha j advocate a further increase in the land and income tax. *" ■-"" Mr. Nosworthy (Ashburton* contrasted the taxation imposed on the workers under the British Budget and that imposed under the Budget of the National Government. The workers in New Zealand had escaped more completely than >-' any other section of the community. " Sir. Isitt (Christchurch North) held " that the primage duty could not be passed - on by merchants, especially in cases where prices are standaidised. He would not support the amendment of the iaem» ber for Patea because it risked the whola - BilL

Another Amendment. WMr. Hine (Stratford) said he did not agree with the proposed primage duty and he intended to move an amendment " that this House disagrees with the pro- "z. posed primage duty of 1 per cent., estimated to produce £200,000, and that it recommends the Government to impose in ' lieu thereof a minimum beer duty of 6d per gallon, with a corresponding reduction ':■.. m the primage duty." This would reduce ' the Customs taxation by the extra amount raised from the increased beej . duty. He advocated the abolition of the : mortgage tax. He moved his amendment.",: Mr. Webb (Greymouth) urged' a duty ' on imported . coal which would * produce ' £50,000. ' Mr. Wilkinson (Egmont) advocated the reinstatement of the double totalisator u\":„ a means of increasing the revenue (Left sitting.!