INCOME TAX

New Zealand Mail, Issue 1831, 10 April 1907, Page 2

INCOME TAX

EXHIBITION STALLHOLDERS. THE DEPARTMENT’S EXACTIONS CONFORMITY WITH THE LAW.

Exhibitors having selling rights and proprietors of side-shows at the Exhibition are reported to be highly indignant owing to a sudden intimation that they are liable to pay income tax on ;tlie profits Made during the Exhibition.” Forty-eight exhibitors have received the following notice signed by the Commissioner of Taxes : —“ I beg to /lraw your attention to +he fact that you are .liable to pay income tax on "the profits of the business being done by you in the; New Zealand International Exhibi- ' tion, and Under section 69 of the Land and Income Assessment Act,^H9oo, a deposit to ensure the due assessment arid payment thoreqf is required.. I. shall be .glad, therefore, to receive a. deposit of £2O forthwith. Oil the completion of-the Exhibition full returns should be furnished, and an exact assessment will-be made. If the deposit is found to be in excess of the tax payable, a refund will he made, and if any. further balance is due the same must, be paid. I enclose copy of regulations. The deposit should be lodged with trie Collector of Customs, Christchurch.”

In view of the discussion which has arisen on this question, it. is interesting to quote the law in respect to non-resi-dent agents and non-resident traders. Section 12 of the Land and Income Assessment Act, 1900, as amended by section 3 of the Act of 1903, says (subsections'6 and 7) : The Commissioner may from time to time, as he thinks fit, assess any specified non-resident agent or nonresident trader for income tax ,in respect of any specific transaction, or of all transactions during any specified period, and may fix the amount ,of the tax at the fate then last in force (if the rate, of tax is not then fixed by law), and on the assumption that the specified transaction, or, as the'case may be, all the transactions during the specified period, have produced such net profit as the Commissioner deems likely to have been made, being in no case less than 5 per centum of the gross proceeds resulting from such transaction or ' transactions. The tax 'so fixed by the Commissioner shall be payable on demand, and shall be recoverable forthwith in the same manner in all respects as in the case' of income tax jn arrear.

The regulations;of the department provide -y. '

Theatrical Companies, etc.—A deposit to be collected. As a full return can invariably be made before. departure from New Zealand, it will not be necessary to delay the adj ustinent of the assessment, except in cases where the manager so desires. Managers of theatrical 'companies are made agents for theiremployees under the Land and income “Assessment Act Amendment Act, 1903, and are responsible in the first instance for the payment of the income tax due by each employee, but have the right to deduct such tax from any moneys payable to the employee.

Commercial Travellers,—A deposit to be collected in all cases. The deposit is made to cover any incometax . which may become due. If the. representative is unable to -f urnish a complete return at the end of his visit, the deposit will be held' for a sufficient time to enable orders resulting from the visit to New. Zealand to reach the principal and to be included in a full return to the Department. The return may 7 be held over until the following trip or may be' forwarded when completed to the'Departmerit by post, when .'an . adjustment will be made, either by refund if the deposit exceeds, the tax payable, or by a claim for the balance of tax if the deposit is less. The , deposit should be paid at the port of arrival, even when a traveller Las been and is still unable to furnish a return for the previous visit, ancl although a deposit may be standing to his credit.

Interviewed by a -“Times” reporter yesterday with reference to the Christchurch exhibitors 3 objections, Mr P. Heyes, Commissioner of Taxes, explained that the law provided.that every person who .started 'business in the State nnist pay a deposit, to the Customs ae a guarantee that die would make a return of the income derived from the business. There was no. question in regard to the law governing the exhibitors’ liability, though the exhibitors considered that they, had some special claim for privilege in this matter.; He did say when the Exhibition was. opened that he would riot claim tax upon any indenting done from samples, shown at the Exhibition, but it was not here where the complaint lay. It had to be remembered that there were many 7 Assyrians and others who ran shop's at the Exhibition, making great profits on the sale of their goods. The income thus derived was from business done in. the State and was clearly taxable. ' For' instance, theatrical oomparii?s doing business in New Zealand were,taxed on their income, and why not ’‘The Pike,” and the.'other side shows at the Exhibition? There was never any difficulty with the 'permanent theatrical companies periodically touring this country—they all paid tax on their profits. These_ companies had visited New Zealand during the Exhibition, against which they had to compete, y r et they bad to pay the tax all the same, and the law did not make any exemption.

In regard to not taxing those agents indenting from samples shown at the Exec! out that in the case of agents who had

travelled with samples through the counhibitio.n,. the Commissioner further pointtry and had gone otitside the Exhibition for business, they had been taxed on their income the same as' other commercial travellers we're taxed. In the present instance, he failed to see where the “sharp practice” came in, as alleged by the South Australian Commissioner, seeing that Christchurch shopkeepers who paid income tax were in competition with Exhibition shopkeepers who claimed exemption; and, moreover, it must be remembered that where a man’s business resulted in loss hie deposit for. income tax. was returned in full, and if the business showed a smaller profit than the amount of the the balance,-was returned. >o deposit or tax had been collected from sample exhibitors, at Christchurch. As to the attitude of the Department in this matter, there was, -added the Commissioner, no authority for waiving the collection of the tax, which was being collected under statute law. “