INCIDENCE OF TAXATION.

Otago Witness, Issue 3774, 13 July 1926, Page 68

INCIDENCE OF TAXATION.

NO CHANGE POSSIBLE. In the Financial Statement the Minister of Finance, dealing with the country s revenue and taxation, said: In setting out before honourable members the estimated position in the current year, there are first of all several broad considerations affecting the question of taxation and revenue that 1 will briefly refer to. Aa I have shown earlier in this statement, the absorption of direct and indirect taxation by social and educational services shows considerable proportionate increase as compared with pre-war conditions, vvhjle the cost of defence is rising rapidly. These items bring before us some outstanding facts directly affecting taxation. tt is, of course, always a question for Government consideration, and particularly since the war, what relief can be given to the taxpayer? Further substantial relief from taxation cannot be expected so long as the war-debt services have to be borne—an unescapable burden —which,, combined with largely increasing social services, retard any movement in the direction of lessened taxation. In certain quarters there will no doubt be some criticism of the fact that I have not seen my way to recommend any reductions in taxation this year, but 1 am strongly of opinion that the uncertain outlook in trade and finance calls for the utmost caution. Moreover, the various legislative proposals of the Government to be given effect to this year, will impose con alterably heavier chargee on the Consolidated Fund, and this consideration applies particularly to the proposed scheme for assistance to large families. Indeed, it is possible that it may become necessary to raise additional money, but I am hopeful that the revenue will remain sufficiently buoyant to avoid this. Furthermore, I do not think it wise to make any changes in the incidence of taxation which may have the effect of yielding a lesser tax revenue this year. At any rate, so far as the proposal to substitute taxation of individual shareholders for company taxation is concerned, I think further consideration of this matter must remain iu abeyance until the data now being collected is complete. I am also anxious to continue as long as possible the practice of applying surplus revenue to war-debt reduction, and I do not think relief from taxation at the cost of impairing that policy is advisable. I intend to ask for authority to transfer up to £1,000,000 to the PuMic Works Fund as ways and means permit.