FEW CHANGES

Poverty Bay Herald, Volume LXIII, Issue 19128, 24 September 1936, Page 5

FEW CHANGES

LAND AND INCOME TAX BILL FOLLOWS BUDGET MINOR EXEMPTIONS NO HARDSHIP CLAUSE (Parliunentory Reporter.) -." this'.lay. The principal feature of the ; mendments to the Land and Income Tax Act which were introduced in the House of Representatives by Governor's message is a concession in respect to the graduated land "Lis where lands are Jie.ld by superannuation funds. These lands .fire to*be exempt from the land tax-. /It was explained by the Hon. W. Nash, Minister of .Finance, that where inco.no from 'land was used exclusively for superannuation purposes no tax would be. payable. Superannuation funds were invested hi lands and a - good deal of it was placed in buildings, of which the sites -were liable for laud tax, but for the amendment to levy the land tax oil-this-class of land would" destroy Hie principle of the extension of pension payments,'for the Government wouhi be giving, extra payments in one direction and :takntg" thehi Away, from another section of'ihe community. Another concession in the bill iffates to religious bodies who will be charged land tax at one-quarter of the norma! rate, but not less than £d in the £. This, said the Minister, would relieve churches and others who would 1 ave been hard hit but for this reduction of the present charge of one-half uie ordinary rate to one-quarter. POSITION OF NATIVE LANDS The bill also provides that the definition of "native" under the Land and Income Tax Act is to include a haifcaste, which is in line with the definition in the Native Land Act. A former section of the principal Act, designed to prevent the evasion of Untax by transferring a portion of the land to a relative and then leasing it back at a nominal rental, was repealed when the graduated land tax was abolished in 1931, but the amending bill reinstates this provision.

The clauses relating to income tax provide, as announced in the Budget, for a flat rate exemption of £2lO to all taxpayers other than companies nr absentees, and prohibits any deduction from assessable income of sums paid in unemployment tax. ; jSection 8 of the bill enables an allowance" to be made in respect to assessable income for any premium paid by a lessee or hirer of any form of 'machinery held on lease. This, stated the Minister, particularly applies to machiaery leased for boot manufacturing, and is a revival of the provision of the liw which formerly applied to leased talkie apparatus.

Losses by companies are dealt with in section 9, which permits the carrying forward of a loss for three years, and covers cases where a company \>bich has made losses, instead of going entirely into liquidation and winding up, has had its shpres purchased by entirely new shareholders who proceeded to. write off the losses incurred by the oid company. The clause will enable the new shareholders to obtain the benefit of the carry forward of these losses. v. : TAX IN INSTALMENTS

Accident insurance business is subject to a higher late of income tax than income from life insurance, the latter paying at nine-twentieths of the usual rate, but it was explained by the Minister that most life insurance companies iilso carry on accident insurance in competition with other insurance companies, and section 10 would provide that accident business should be sepa,iifen from life business, so that income ir<m accident business should be paid at the normal rate.

Section 11 deals with debentu.-es issued by a company without a axed rate of interest, and provides that the interest shall be deemed to be non-assessable income for the purpose of determining the rate of tax to be applied to assessable income. Such interest will now be used for the same purpose as interest from free-of-f.ai stock dividends, md free-of-tax debenture interest.

A £SO flat-rate exemption is to be given all taxpayers in respect of a wife. husband, or housekeeper. In the past, this exemption gradually disappeared, stated -the Minister, but it will now be maintained.

There is also a clause permitting the department to collect income tax by instalments in advance.

The recovery of income tax moneys payable for alimony or maintenance is dealt with in section 15, which directs that the tax shall be paid by the person required by the court order to pay the alimony or maintenance.

'. "I hear no reference to a hardship clause," commented the Rt. Hon. J. G. Coates, (Nat., Kaipara), referring to the graduated land tax.

"There is an existing hard; hip clause," replied the • Minister. "But that is not a hardship clause at all. You told us it was when you introduced it," Mr. Coates replied. He was sure that there would be serious hardship, especially where land was mortgaged.

Mr. Nash stated that he would be glad to look into the matter before the bill was read a second time. There was no hardship clause in the bill at present. ■ The bill was read a first time.