THE NATIONAL BANK

New Zealand Times, Volume XLII, Issue 9783, 5 October 1917, Page 2

THE NATIONAL BANK

PAYMENT OF.DOHBLB INCOME SUGGESTED MOVE OF HEAD OFFICE TO NEW ZEALAND. In the course of his speech at the annual' meeting of the National Bank: ot New Zealand, held in London on July 17th, the chairman referred .at some length to the duplication of income tax (as reported in the "Times'' recently). 'The subject was also touched upon by other' speakers at the meeting. Mr JC. Hanna said that during the. past two years financial Hud commercial companies had had to .face .the most serious problems. "The position, he declared, "has been especially difficult in the ease of banks and companies with bead offices in London,. but . whose principal operations are centred in Australia and New Zealand, where taxation under., all heads has increased enormously since the’war started. The corporate bodies concerned have not only had to Pay income tax’Von the' profits .made in the overseas Dominions,- but they have also had tp provide for the heavy English impost levied at this end on .the same profits. The* Question of this dual taxation, however, is one which has been so thoroughly threshed out in the press and at the annual meetings of the wM' panics concerned that I shall not take up your time bv going into further details here. There is hank or company which has greater cause for complaint on the score of doubhy taxation than' the National Bank of New Zealand. I sav /this because more than half the share-capital i« held in New /ear land, more than 80 per cent of the business is centred in New Zealand, and more than 80 per cent, of the profits are made' in New-Zealand on .capital supplied in'New Zealand; and jet, as I have. already said, these profits are not only taxed in« New Zealand, but they are taxed again at this end. Obviously, gentlemen, the position is one which calls for specific action in order to safeguard the interests of shareholders, and it appears to me that, in the-absence .of any equitable adjustment of the matter afi the hands of the Chancellor of the •Exchequer, the only remedy is to trans-; fer the head office. If that "were, done there, w-puld be a saving in taxor' bion which would equal the best part of 4 per cent, on the paid-up capital of the bank. I shall not weary you by going into details as to how I arrive at this amount, but you may rest perfectly satisfied that the anticipated saving, as I have stated it. hae, if anything. • been under-estimated. Xdo non know that I can usefully add to these breef remarks except to-express the hope, that as the articles of association of the bank are now being amended, the points to which I have briefly referred, as well os all other matters that require attention in the best interests of ehareholdr ers, will be carefully considered by the board before the .revised articles are finally disposed of.” „ ~ The Hon. W. Pembcr Beeves said:— ."I quite agree with what has fallen from my friend, Mr Hanna, as to the weight and burden and unfairness of double taxation; that is to say, I agree ep far as to say very definitely that. I think it is unfair. I think ifc is injudicious, , and I think it imposes upon us a burden much heavier than we ought to be asked to bear. But ■ with regard to the actual amount of that burden and tho actual proportion that it bears to, the paid-up capital of the company, calculations may, of course, differ. I can only say that my own cal-' oute-tion is—that if the head office of the company were removed to New Zealand—a course to which I think there are many objections, but into which I will not eo—l think the saving, though substantial, would not amount to 2 per cent, pa the paid-up capital of the company, but would probably bo somewhat less than 2 per cent.” Before tho meeting closed the chairman made a, few remarks endorsing Mr Reeves's opinion as to the ’ extent to which the bank is affected by double income tax, and suggesting that any attempt to remove the head office from London wonld be a roost unpopular one.