ANOMALY REMOVED

New Zealand Herald, Volume LXIX, Issue 21345, 21 November 1932, Page 10

ANOMALY REMOVED

STAMP DUTY ON INTEREST

CERTAIN EXEMPTIONS REVOKED

The anomalous position which permitted certain securities to be exempted from the 10 per cent stamp duty imposed on intorest by the National Expenditure Adjustment Act, while at the same time inflicting the tax on others, has been removed by thp Government. The exemption was in respect of investments of State superannuation funds and moneys invested by certain specified institutions, organisations and funds. The latter exemptions have now been revoked, so that the interest on all such private investments is on the same dutiable footing. State superannuation funds are still exempt. Subsequent to the passing of the Act an Order-in-Council was gazetted in June, exempting, among others, securities in which are invested moneys belonging to the following:—New Zealand Co-operative Dairy Company, Ltd., employees' superannuation pension fund of the National Bank of New Zealand, Ltd.; staff superannuation fund of the Union Bank of Australia, Ltd.; and Union Steam Ship Company, Ltd., Superannuation Association.

It is a widespread practice for commercial firms to conduct superannuation funds for the benefit of their staffs and to invest the proceeds in local body and other securities. With the passing of the the interest on these securities became subject to the 10 per cent tax, and the calculations of return based on existing contributions was upsot. When it was announced that certain of theso funds wero to be exempt from the tax and disabilities arising from it, dissatisfaction was caused among the contributors to and administrators of the funds not so favoured. The position was held to be at least inequitable and representations on the matter were mado to the Government. An Order-in-Council has now rectified the position by revoking the previous Order-in-Council and thus placing all on tho samo basis and subject to the duty.