THE BURDEN OF TAXATION.
From the proceedings of the Taxation Commission in Dunedin yesterday, it is apparent that the system of taxing companies as individuals will be thoroughly examined and that the commission's report will reduce the conflicting and to some extent confusing views of the question to a simple and logical exposition of its value. Part of the evidence given by one of the witnesses, a public accountant, sug-„ gests an explanation of the criticism of the system, and points to the fundamental objection to it. This witness said that the embarrassment experienced in the slump years arose from the practice of paying taxes in respect of one year's profits out of the following year's earnings. It was not, of course, a universal practice, but some of the larger public companies undoubtedly adopted it, and legitimate protests against the weight of taxation were invalidated by the illogical contention that the State's levy had taken more than shareholders received in dividends. The Government may reply that it cannot be responsible if . taxpayers make mistakes in their accountancy, but the practice has undoubtedly been encouraged by the State's own methods. Taxes are not fixed until
months after the income has been earned, 'and collection'' is a year behindhand. It is doubtful whether any other country is so cajeJess in these respects. The British Budget appears in the first month of the financial year, and both Britain and America make quarterly collections. Whether or not the latter provision would be popular in New Zealand, it is certain that a much sounder position would be obtained by the fixing of taxation earlier in the year. These considerations concern individuals as much as companies, and it will probably be found that the objection to company taxation also rests upon an equally general reasonthat the fault does not lie in the method but in the weight of the charge. Advocates of individual taxation contend that the present method is injurious to companies, but they cannqt confute the conclusion that the alternative they propose would involve impracticably high charges upon individual incomes. If the State's demands were reduced to an amount that could be obtained by a reasonable charge on individual incomes that sum, it must be admitted, could be obtained by the present methods without embarrassing companies.
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Bibliographic details
New Zealand Herald, Volume LXI, Issue 18696, 30 April 1924, Page 8
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382THE BURDEN OF TAXATION. New Zealand Herald, Volume LXI, Issue 18696, 30 April 1924, Page 8
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