TAXATION BURDEN

Otago Daily Times, Issue 26232, 16 August 1946, Page 6

TAXATION BURDEN

Substantial Reductions

ELECTION YEAR BUDGET

Summary of Provisions

Taxation adjustments involving a loss of revenue of £18,000,000 for the present year, and representing a concession to the taxpayers of £21,200,000 for a full year, were announced by the Minister of Finance, Mr Nash, when he presented the Financial Statement in the House of Representatives last night. The new concessions are as follows: — Reduction of income tax surcharge from 33 1-3 per cent, to 15 per cent. The rate of income tax on companies will be restored to that which applied up to March, 1942; in other words, companies will now pay the basic rate of company income tax, plus 15 per cent. Elimination of excess profits tax. Reductions in sales tax. Reductions in gold duty and primage duty.

These reductions are in addition to the recent reduction in the national security tax, the abolition of the social, security registration fee, and the increased allowance for wife exemption. The taxation adjustments show the following diminutions:—Reduction of income tax surcharge, £4,750,000; reductions in sales tax, £7,000,000; elimination of excess prqfits tax, £500,000; reductions in gold duty and primage duty, £ 100,000. With the reductions of £8,900,000 already in operation, the total is shown as £21,200,000 for a full year.. The reduction in the sales tax is being effected by the abolition of this tax on all building materials; clothing of all descriptions; household furnishings, including perambulators; and a number of miscellaneous items, including dried or dehydrated fruits and surgical and dental instruments. The additional gold export duty imposed in 1939 has been abolished.-

The 3 per cent, primage duty on books and periodicals has been removed on the understanding that book prices to the public will be reduced by 5 per cent.

The Minister made it clear that there would be no immediate alteration of Government policy with respect to either stabilisation or import control.

The additional annual expenditure on defence resulting from the war and represented by the difference in 1939 and 1946 costs is shown to be £19,300,000.

An item of £120,000 is included in the annual appropriations to 'cover the cost of the general election.

Some of the Government’s long-range plans for the economic and social development of New Zealand were outlined by the Minister. Two of the most important of these envisage the erection of 12,000 houses per annum during the next five years and a vigorous schoolbuilding programme.

Efforts will be directed, Mr Nash said, to increasing all forms of primary production, as -well as to the development of worth-while secondary industries.

Plans are in train for the settlement of 8000 ex-servicemen on the land.