AN INCOME TAX PUZZLE

New Zealand Times, Volume XXXIX, Issue 8782, 11 July 1914, Page 4

AN INCOME TAX PUZZLE

The Minister for Finance i« courteous enough to supply us with an explanation on the above subject to which we devoted a few dines the other day. It is as follows: "The writer of the article has_ evidently misunderstood the position and might have avoided tho misunderstanding had he referred to any of the parties concerned. _ Shortly put, tho position is that prior to 1907 timber companies were assessed, for land tax on the value of their timber lands, including the value of tho growing timber. ' They -were also assessed for income tax on the profits from their sawmilling business, but from,, the assessment of that business the profits that oould he held to be profit derived from land were excluded. The assessment was merely an assessment of the profit derived from tho working of tho timber. By the amending Act of 1907, at tho request of the sawmillers, land tax on the value of the timber was abandoned, and the millers were assessed on the total profits from their eawmilling business as a substitute. There is not, and there never has been, any double taxation of this or any other industry." We feel obliged for the explanation. But wo cannot see how reference to the parties interested would have avoided misunderstanding. Our impression was that the parties rambled about in a fog whan they discussed the question with the Minister, and if appealed to might have made misunderstanding worse misunderstood. The last two sentences of the explanation aro certainly clear enough to avoid misunderstanding, and we can only wonder at tho statements of the parties. Before 1907 the position was confusing, as the Minister’s explanation indicates, but in view of the last sentence cannot be said .to admit. We are glad to learn that the taxing authority has done what we thought it ought to have done, and wo hope all the timber people will appreciate the fact better than they seemed to have done in their discussion of tho other day.