ADDITIONAL TAXATION.

New Zealand Herald, Volume LVIII, Issue 17965, 15 December 1921, Page 6

ADDITIONAL TAXATION.

AMUSEMENTS'TO PAY.

HIGHER LEVY ON RACING. INCOME TAX REBATE. FIVE RER CENT. REDUCTION. [rnt telegraph.—special reporter.] WELLINGTON. Wednesday. Important provisions are contained in the Finance Bill, introduced by ViceRegal Message in the House of Representatives to-night. The amusement ,tax is to be increased on the basis of one penny for each sixpence. The taxes on dividends and racing stakes are to be increased. A five per cent, rebate is to bo allowed for promi t payment of in- j come tax. Tho increased revenue will amount to £400,000, while tho concession in connection with the income tax will cost the Government about £300,000. The Primo Minister explained the Bill Briefly when it was introduced. He said ho was proposing to allow a 5 per cent, rebate in connection with the income tax duo in February next. That was a very important provision. The Bill provided that a taxpayer who chose to pay his income tax in advance might do so, and receive interest at the rate allowed by the Post Office Savings Bank. Some people had asked for this provision, which was a profitable one for the Government. The amusements tax was to be in creased, continued the Prime Minister. Mr. T. M. Wilted, Leader of the Opposition; I hope you aro taking it off the Jow-priced seats and putting it on tho hign-priced scats. Mr. Massey: That is a very difficult thing to do. I have been looking at what has happened in England and Australia, and I find that they seem to have got back to the flat rate. We arc proposing a tax of 2d for every shilling. The sixpenny tickets will be taxed Id. Mr. H. E. Holland Leader of the Labour Party: Then you are going to tax the children. Mr. Massey: It is an optional tax. This is much more than we have been collecting, but it is not as high as the amusement tax in Australia and England. Dividends and Stakes. "We propose to gel a little more out of racing," he continued.? "The proposal is not exactly what I intended at first. Only two forms of taxation are provided in the Bill, one on dividends and the other on staker. I am told by racing men in the Houses-hat this is not likely to affect tho country club 6. It will be a tax on dividends, not on investments. The dividend duty is to be one shilling for every £ or fraction of a £, instead of sixpence. The stakes duty is increased from 1 to 10 per cent." Mr. Wilfdrd: They are all dropping their stakes. Mr. Massey: I have been surprised bow they have increased their stakes in recent years. I am giving the clubs back their fractions! In regard to tho racing taxation, he said he understood the racing people would accept these proposals on the understanding that there was a clause /to the effect that the proposals would be reconsidered in two years. His own opinion was that all taxation should be revised within threo years. Mr. Holland: You can revise it at any, time.

Mr. Massey. I know we can do it at any time. I am certain the country cannot continue to carry the load of taxation it is carrying now. It had been intended, he added, to put a clause in the Bill .providing that the tyro tax be earmarked for the improvement of roads. •''

Labour Party's Attitude.

Mr. Wilford asked how much the Minister expected to make out of the proposals. Mr. Massey said ho could not say exactly, but he thought ■he would geft £200.000 from the amusement tax a mil £200,000 out of matters connected with racing. Mr. Wilford: That is £400,000, and you are giving £300,000 away. Mr. Massey: I am not giving it away because the people cannot go on paying, a high income tax. Already it is seriously affecting the business of the country. Mr. Holland: I just wish to say that in so.far as the reduction in the income tax an i the imposition of amusement tax are concerned the Labour Party will exhaust all the forms of the House in opposing them. (warmly): Very welly then, I will keep the hon. member and his Labour Party here for the next six months. Mr. Holland: And I am prepared to stay here till the Parliament ends. Debentures and Companies. Explaining other provisions of the Bill the Prime Minister said that provision was made for the remedying of an old difficulty regarding debentures issued under the Land Settlement Finance Act. It had been argued that these, debentures were liable to income tax. The intention of Parliament had been that they should be free of income tax if held abroad. The Bill was making the point clear. It was not an important matter, but it had produced a lot of unpleasantness. Certain companies had been issuing debentures, which they J asserted to be free of income tax. An impression had got abroad that the holders of these debentures might have the right to claim a refund of income tax, although as a matter of fact they had not paid it. _ The Bill cleared up that point by providing that there should be no refund. Tlie law of last year regarding the collection of income tax on the debentures of local bodies was being amended. The duty of collecting the tax had been imposed upon'the local bodies, and they had objected. The Bill provided that the duty of the local body would be to supply the taxing department with a list of debenture-holders. The department would then undertake the collection of the tax. If the local body did not supply the list it would be liable to pay the tax. The department believed that it could collect the tax under this arrangement. .foreign Insurance Companies. There was a small provision with regard to people who effected insurance with foreip companies that did not carry on business in New Zealand. These companies were to be liable to income tax and the person assuring must accept the responsibility. Tho Bill provided for the collection of the duties on beer and tobacco on the lines indicated in the resolutions already adopted by the House. A provision for the establishment of a separate account for the proceeds of the tyre tax would \»> inserted in the Bill. The present tax on racing stakes 1 imposed since 'November 1, 1915, is 1 per cent., and' that on dividends is 2£ per cent. (6d in the £). - The rates of amusements tax, imposed since November 1, 1917, are at present as follows.:—Where payment for admission exceeds 6d, but does not exceed 2s 6d, Id; 2 S 6d' to ss. 2d; 5s to 7s 6d, 3d; 7s 6d to 12s 6d, 6d; exceeding 12s 6d, Is for the first' 12s 6d and Is for every 10s or part of 10s over 12s 6d.