FREE OF INCOME TAX

New Zealand Times, Volume XLIX, Issue 11302, 30 August 1922, Page 5

FREE OF INCOME TAX

“A VERY SERIOUS THING” FIFTY MILLION POUNDS OF BEST SECURITIES. STATEMENT BY TREiUIEft. Tho question of free-of-income tax war loans was again brought before the House of Representatives yesterday by the Hon. J. A. Hanan (Invercargill). The hon. member stated that during the war the United States and every State in Australia had raised loans, both State and Federal, free of income tax; and he noticed that in Victoria the question of the definition of the term was being raised, and the Victorian State Tax Commissioner had ruled that where a man had an over* draft be should be exempt from taxation to the amount of the interest paid on it. “A SCHEME IN HAND.* 4 The Prime Minister stated that ho had hoped to have more discussion with regard to free-of-income tax do bentures while the debate on the Financial Statement was going on. Up to the present, however, not very much had been said on the matter. He was not looking for a loophole or a way out. At the time that these debentures were placed—and he believed most of them compulsorily—it was understood that they were to be free of income tax, and there muist be no attempt to evade it. Personally, as head of the Government and Minister for Finance, ho had got a scheme in hand at the present moment the details of which ne was not yet 'prepared to discuss. But it would not do any injustice to those Who held those debentures. At the same time, he held that it w'as a very serious tilling to have fifty million pounds’ worth of property Mr G. Witty (Riooartcm): You have bought two millions’ worth yourself, haven’t you?

Mr Massey: Yes; 49 millions, then to h - strictly accurate. It is a very serious thing indeed to have nearly 50 million pounds’ -worth of the best securities in New Zealand free of income tax.

Mr W. E. Parry (Auckland Central) : You can’t go on with it ae it is. Mr Witty: A great many of these debentures mature very soon, -don’t they?

Mr Massey: When they mature there will be no difficulty in dealing with them. The Government has not lost sight of that; but, while it is going to look after the interests of the country it is not going to do any injustice to the othans. The Government is following the matter up. Mr Hanan asked whether something could not be done on the line of taking into account the interest on these bonds when assessing the rate of income tax that the holders had to pay on the balance of their incomes. Mr Massey: I know perfectly well what the hon. member refers to, and have not lost sight of it. I will be able to refer further to it when dealing with the second reading of the Finance Bill.