INCOME TAX INEQUITY

New Zealand Herald, Volume LXXV, Issue 22994, 23 March 1938, Page 14

INCOME TAX INEQUITY

Attention is drawn, in an article published to-day. to the effect of a clause in the Finance Act, passed just at the end of the session, dealing with the taxation of companies. When explaining the clause the Minister of Finance asserted that there had been substantial evasion of income tax in the past by companies which altered the date of their annual balances. He therefore produced this legislation, designed to stop it, and, at the last moment, made its operation retrospective to 1932. The article shows there is no substance in the claim that taxation has been evaded. If there were, it would be a reflection on every past Commissioner of Taxes. The Minister hafi, in fact, cast that reflection on public officials of whose integrity, ability and zeal there could be no question. Actually, as is proved conclusively, the commissioners in the past followed a practice resulting in the collection of income tax in a way that was fair to the taxpayer and the Government It would have been strange if Mr. Nash, the amateur in income tax law, had known so much better than the trained professionals. He certainly does not, and his over-confidence in his own acumen has led him to add still another to the inequities which disfigure the income tax system. Not content with that, he has made his clause retrospective for six years. As a result, income tax assessments, made in accordance with the existing system, endorsed by the then commissioners, and accepted in good faith by the companies affected, are to come up for review, with the object of exacting more taxation. This is an iniquitous proceeding and a thoroughly dangerous precedent. Taxpayers, whether individuals or companies, who evade the law and deceive the department, are liable to punishment, and deserve no sympathy. When the legislative machine is used against those who have met what they believed to be their obligations, who satisfied in full the demands made on them, all taxpayers will be justified in wondering whether anybody is safe from this vicious -syßtem of retrospective- assessment.