TAXPAYERS' BURDEN

New Zealand Herald, Volume LXX, Issue 21580, 26 August 1933, Page 14

TAXPAYERS' BURDEN

COLLECTOR'S VIEWPOINT BOOKMAKERS AND OTHERS LIABILITY AND EXEMPTIONS An address on taxation matters was given by the Commissioner of Taxes, Mr. C.' K. Dowland, in Christchurch this week, under the auspices of the Canterbury branch of the New Zealand Society of Accountants. An "absentee" taxpayer was regarded by taxation authorities as "fair game," Mr. Dowland said. He was one who, during a taxation jear, resided for only a part of that time within the country. But he received none of the exemptions which were given to a taxpayer domiciled in the. Dominion. Accident and life insurance could be deducted from assessable income for taxation purposes, but one man had recently tried to impress upon the department that tho insurance of a racehorse came under the provisions of life insurance. Alimony, on the other hand, was taxed twice. It was a source of income to tho person who received it, and it was really part of tho income of the man who paid it, so that two persons paid taxatioji on the amount. "I have a good knowledge of the bookmakers of New Zealand; some of them I know personally," said Mr. Dowland, in discussing taxation 011 betting. "They are not a, bad lot at all when it comes to paying income tax. Thcv would far sooner pay income tax than be caught dodging it. It has been decided that income from illegal sources is assessable, and so it should bo. It is well established that a bookmaker must pay taxation on his profits. A bookmaker very often endeavours to set off a presumed loss by putting money on tho totalisator. If he loses it on the machine wo allow him the loss. If he wins on the totalisator he is assessable for profit.

Losses on Totalisator "This is, of course, not so for the 'punter.' If you go to a racecourse and put money on a totalisator and make a loss: that is a purely private matter. You cannot claim it as exemption, for it is not your business. If you make a profit we" do not want to hear about it." . . . If a person mado a loss in business it could be carried forward for three vears before it was absorbed by profits, Mr. Dowland continued. The only ones allowed to make cash returns were doctors, because, to some extent, they were regarded by the department as charitable institutions. A doctor had always to do his job, and he could not say before going to a case what Jiis fee. would bo and when it would be P Tt did not follow, of course, that all doctors were charitable institutions. One Scottish doctor, for instance, when asked why he had changed from general practice to skin diseases, replied that first he was not called out at night, second a person with skin disease never recovered, and last, a patient was never bad enough not to ho able to work and earn his doctor s fee. , ,

Taxation of Clubs Dealing with the taxation of clubs, Mr. Dowland said it could bo taken for granted that the departmeut would not assess anv portion of a membership subscription. But income from investments would be taxed, although this would probably not be a large matter. Tho New Zealand Rugby "Union, for instance, would certainly not bo assessed on gate money, because this was spent for the benefit of those who paid it. . Tho union, however, might bo assessed on its investment income. However, sinco it was a body which catered for the public, it was questionable whether the union might not bo exempted. It was possible that legislation might be considered this year in order to exempt from taxation any organisation deriving its profits from iecreation. . Tho department allowed a business man to deduct from his income return amounts embezzled, the view being taken that an employer took a risk ill this direction when ho employed a man. However, he did not think that where a partner was guilty* of embezzlement, the other partner should bo able to deduct from his return the amount he had to make up out of his own pocket. The Hardship Clause

One particular section of the Act, the hardship clause, had been criticised a great deal in the last two or three years. In administering it a commissioner could be a "good follow," but ho had to remember he was a revenue officer first of all. The section was designed to give relief io a man who could not pay his taxation without undue hardship. But the question at all times was not what a man had lost, but what ho had left. After the HaWke's Bay earthquake many taxpayers who had lost a great deal sought an allowance under tho hardship clause. However, it was pointed out by the Crown Law Department that no matter what a man had lost, if ho had sufficient to pay his taxation without real hardship, he was bound to do so. If a man supported his widowed mother, he was allowed to deduct up to £SO a year from his assessable income. But there were many men who supported both father and mother and received no allowance at all, for tho woman was not widowed. "They aro very much worse oil'," Mr. Howland said, "and this is one thing that should be put right."