FINANCE BILL

New Zealand Herald, Volume LXXVII, Issue 23748, 30 August 1940, Page 11

FINANCE BILL

VARIETY OF SUBJECTS TAXATION PROCEDURE SUPERANNUATION RIGHTS [BY TELEGRAPH —SPKCIAL REPORTER] WELLINGTON, Thursday Alterations to the income tax law affecting some classes of companies are contained in the Finance Bill No. 2, which was introduced in the House of Representatives to-day. Legislative authority is given for the development of the linen flax industry, and the Minister of Industries and Commerce is empowered to make general arrangements for the manufacture and disposal of the fibre. Anything done in this direction in anticipation of the passing of the bill is validated. Taxes on Savings Bonds Purchasers of national savings bonds are to pay in advance the present value of the national security tax and social security charge on the income derivable • from the bonds, which will then be exempt from any further liability in respect of these taxes. The proceeds are to be paid in equal proportions into the Social Security Fund and the War Expenses Account. Several clauses in the bill make alterations in the assessment of income tax payable by various classes of companies." One clause is designed to ensure that double taxation of goldmining companies is avoided. It was officially explained that, a goldmining company was taxed not on the profits in the ordinary way, but on the dividends declared out of its profits. If a company received a dividend from a subsidiary company, then the profits of the subsidiary would be taxed twice, and the clause enabled a parent company to be allowed a credit for the amount of the tax paid by the subsidiary on the dividends received by the parent company and paid out again as its own dividends.. Government Superannuation Funds Another clausei prevents companies from transferring share capital to debenture capital with the object of avoiding taxation. The net is also tightened on proprietary companies. An important clause to the Government Superannuation Fund gives the right to a superannuitant to accept a reduced retiring allowance so that an annuity may bo paid to bis widow or dependants after his death. Widows of railwaymen are placed on the same basis as widows of other members of the Public Service in respect of superannuation. Any member of the Public Service who stands for or is elected to Parliament may postpone his superannuation rights accordingly, but is given the right to resume payments to the superannuation fund later. It is provided that the Rt. Hon. J. G. Coates (Opposition —Kaipara) is not to be disqualified from retaining his seat in Parliament because of a payment to him of public money for the purchase of a sound camera and equipment for the Government film studios. A clause dealing with sales of petrol provides that any purchaser whose quantities have been cut down through restrictions to an amount below that necessary to qualify for the trade discount must be allowed the reduced price on the smaller quantity. The clause is given effect. The bill was read a first time.