COMPANY TAXATION.

New Zealand Herald, Volume LX, Issue 18389, 3 May 1923, Page 6

COMPANY TAXATION.

HOW THE LAND IS AFFECTED,

MORTGAGE MONEY SCARCE.

FARMERS WANT ABOLITION.

fBY TELEGRAPH.—PRESS ASSOCIATION ■■'; WELLINGTON. Wednesday.

The executive of the New Zealand Farmers' Union was addressed yesterday by Sir. "W. D. Hunt, formerly a member of the Efficiency Board, on the subject of company taxation. Mr. Hunt said New Zealand was the only country in - the world with company taxation. All others taxed individual incomes. , i

The effect in New Zealand was that a company manager who had to pay 7s 4d in the £ added it to Ms charges because shareholders expected dividends. Tenfourteenths of the shareholders in New Zealand companies were people who in- v dividually would pay no income tax. If individual taxation were introduced company managers could reduce their margin of profit enormously. For farmers and for everybody else this would, reduce the cost of living and also the- wages fixed by the Arbitration Court.

Mr. Hunt said that the small trader paying only 2s 4d in the £ income tax is now getting the same rate of profit as companies paying 7s 4d, and was having " the time of his life." Investors who could get 5 per cent, from public body bonds expected at least 5£ per cent, on farm mortgages, but to pay them 51 per cent, companies were compelled to charge £8 12s 6d pea: cent., allowing for 7s 4d as tax. Fanners were specially hard hit by the company tax owing to' the consequent difficulty of getting money. It was more important to farmors to have the company tax reduced than the land tax.

Tho chairman, Mr. G. W. Leadley, of Ashburton, declared this state of affairs was most ridiculous in a. producing country. It was a most serious matter, and the fanner should demand the Premier's reason for continuing this tax. '~ Unless' the tax were repealed before the moratorium expired, it would make it impossible for farmers to. got money on mortgage, and matters would bo made much worse than they would be if there were no such tax. It prevented » great deal of money being invested in broad acres. Ho moved that a request for the repeal of the tax be forwarded to tho Premier.: Th© motion was carried. ■•'..;•