TAXATION OF COMMERCE

New Zealand Herald, Volume LVII, Issue 17574, 13 September 1920, Page 6

TAXATION OF COMMERCE

" BETWEEN THE MiLLSTONES."

MR. BEAUCHAMP'S VIEW.

INJURY TO LARGE BUSINESSES Commenting on the taxation proposals of th© Government, Mr. Harold Beauchamp, chairman of the Bank of New Zealand, said he had felt some surprise on learning the means by which it was proposed to raise a large proportion of the money required from the mercantile community. The proposed additional tax would amount to 17 per cent, in the case of the large trading concerns; instead of the maximum amount of tax being 7s 6d in the £ it would be 8s 9d. Additional taxation was provided, too, on the land held by traders and manufacturers. Then, in addition -to the continuation of

the war scale of taxation and the new land taxes, a heavy charge was being made on companies through the increased post and telegraph rates. 'As much as £5000 -a year had been levied under that head alone from one large financial institution. Companies would find that charge difficult to pass on to the public Traders would be hit with increased wharfage, carting, wages and salaries on.top of the taxation proposals, and would find themselves between the upper and nether millstone. They would probably have to take the risk, as they passed on the burdens imposed upon them, of being summoned for profiteering. Mr. Beauchamr> said he could scarcely see how the Minister for Finance was going to raise the money he needed if he was going to limit the powers of traders. It was a pity some scheme was not, devised to meet the case of .companies with a large capital by which they might be relieved,- of paying the maximum amount of income tax, for the proposals were going to be hard on the shareholders in such concerns. The tendency must be, if the proposals went through in their present form, for investors to put their money into concerns with a small amount of paid-up capital spread their investments over a number of such companies and so avoid the heavy impost proposed. The man who had £1000 in each? of ten companies, with £ paid-up capital of £10,000 each, would find himself better off than if he had his £10,000 in one £100,000 company, as the latter would be subject to the maximum tax of 8s 9d in the £, which impost the smaller companies escaped. The Government, lost a splendid opportunity of raising money in the early stages of the war by not adopting his idea of a new import and export tax. In view of the extremely high" prices realised for the Dominion's primary products, the amount- so raised would never have been felt by the farming community, while the mercantile community would not have suffered materially in shouldering its fair share of the burden.