NEW TAXATION.

Poverty Bay Herald, Volume XLVII, Issue 15318, 14 September 1920, Page 6

NEW TAXATION.

WIDESPREAD DISSATISFACTION. So far the real effect of the Government's new tatxation proposals is not sufficiently well known or digested for conshlerecl opinions to' be formed as to their effect (states the Dominion). Several people whose opinions would be valuable were consulted yesterday by a Dominion reporter, hut m most cases they had not had time to consider the new Bill m all its bearings. From a consensus of the opinions which had been formed generally from the newspaper reports, however, it was not difficult to form the view that the proposals of the Government had come as a great surprise, if not a shock, to people interested m financial, mercantile, and. Industrial concerns of greater or less magnitude, and will make boards of directors throughout the country scratch their heads to know exactly where they are, whilst individual shareholders will lie equally concerned lo ascertain exactly how they are to be affected by the State's taxation proposals as outlined m the new measure. j "BETWEEN THE UPPER AND NETHER I MILLSTONES." I Mr. Harold Beauchamp, chairman of directors of the Bank of New Zealand, I said when approached that It was perI haps a little too early to express a conI sldered opinion on all phases of lhe proposed new Taxation Bill. There were poin.s which were at once obvious. In the first place, they all had to recognise that to meet the country's obligations another fourteen or fifteen millions over pre-war revenue had to be. found. He had to confess that the manner m which it was proposed to obtain a considerable share from the mercantile community had come as a somewhat unwelcome surprise. In the case of those companies m trade m a large way, the proposed .additional tax would amount to 17. per cent.; m other words, instead of the maximum amount of tax under the old Act being 7s. 6d. m the £, it would be Bs. 9d. m the £, which woul(_mean a great deal to many-c ompanies. Further taxation, too, was provided on the land held by traders and manufacturers. The holding of such land helped to bring such concerns within the. scope of the maximum taxationHe had on one occasion had a chat with a former Minister of Finance on this very point, and found it was never intended by' him that large trading or industrial concerns should be penalised to such an extent, though the difficulty m differentiating between classes was admitted. In addition to the war scale of taxation and the new land taxes, a heavy charge was being made on companies through the increased Post and Telegraph rales. He knew of one large financial institution which was mulcted m £{"000 a year under that head alone. This was a charge that companies would find difficult to pass on to the public. Further, traders were being hit with increased wharfage, cartage, wages, and salaries on top of the increases m the taxation proposals. It appeared to him that the traders would find themselves between the upper and nether millstones, for m some instances' the added burdens were not those they could conveniently pass on without taking the chances of being haled before, the Court for profiteering. "I can scarcely see how the Minister of Finance is going to raise the money he needs If he is going to limit the powers of traders," said Mr. Beauchamp. "It Is a pity that some scheme was not devised to meet the case of the companies with a large capital whereby they might be relieved .of paying the maximum amount of income tax, for the proposals are going to be hard on the shareholders of such concerns. The tendency must be if the proposals go through m their present form, for investors to put their money into concerns with a small amount of paid-up capital— to spread their investments over a number . of such companies and to avoid the heavy impost proposed. The man who had £1000 m each of ten companies, with a paid-up capital o/ £iO,OOO each, would flnXi himself better off than if he had his £10,000 m one £100,000' company, as the latter would be subject to the maximum tax of Bs. 9d. m the £, which impost the smaller companies escape. I fancy that the Government lost a splendid opportunity of raising money m the early stages of the war by not adopting my idea of a new import and I export tax. In view of the extremely high prices realised for our primary products the amount so raised would never have' been felt by the farming community, whilst tae mercantile community would not have suffered materially m shouldering Its fair share of the burden."