COMPANY TAX

Southland Times, Issue 18931, 3 May 1923, Page 5

COMPANY TAX

, INJUSTICE TO PRODUCER DEMAND FOR REPEAL (Per United Press-Association). WELLINGTON, May 2. The Executive of the New Zealand Farmers’ Union was addressed yesterday by Mr W. D. Hunt, formerly a member of the Efficiency Board on lhe subject of company taxation. Mr Hunt said that New Zealand was the only country in the world with company taxation. All other coun- | tries taxed on individual incomes. The effeet in New Zealand was that a company manager who had to pay 7/4 in the pound, added it to his charges, because the shareholders expected the same dividends. Ten out of every fourteen of the shareholders in New Zealand companies were people who individually would pay no income tax, if individual taxation was introduced. The company* managers could redone their margin of profit enormously to farmers and everybody else. This would reduce the coSt of living and also wages fixed by the Arbitration Court. Mr Hunt said that a small trader paying only 2/4 in the pound, is now getting the same rate of profit as companies paying 7/4, and having the time of his life. Investors who could get five per cent., from a public body bonds, expected at least 54 per cent, on farm mortgages, but to pay them 54 per cent., companies weie compelled to charge £8 12/6 per cent., allowing for the 7/4 tax. Farmers, specially, were hard hit by the company tax, owing to the consequent difficulty of getting money. It was more important to farmers to have the company tax reduced than the land tax. The chairman, Mr G. W. Leadley, Christchurch, declared that “this state of affairs was most ridiculous in a producing country. It was a most serious matter, and farmers should get the Premier’s reason for this tax still being on the Statute Book. Unless the tax was repealed before the moratorium expired, it would make it impossible for farmers to get money on mortgage, and matters would be made much worse than would be if there were no such tax, preventing a great deal of money from being invested in broad acres.”

The chairman moved that the request for the repeal of the tax be .forwarded to the Premier, and this was carried. •