NOTE TAX

Southland Times, Issue 21197, 25 September 1930, Page 8

NOTE TAX

RECENT INCREASE • ATTITUDE OF BANK OF NEW ZEALAND STATEMENT BY MANAGER (Per United Press Association.) Wellington, September 24. Sir Henry Buckleton, General Manager of the Bank of New Zealand, has sent the following letter to the acting-Minister of Finance (the Hon. E. A. Rahsom) concurring in the bank’s attitude on the increase in note tax: “Sir, —In view of the statements made by some members regarding the attitude of the banks in not themselves shouldering to the full the increase in note tax, may I by way of correction, point out (1) that the banks are for income tax purposes already inequitably taxed on an unscientific arbitrary basis imposed on no other company which assumes a fixed profit, even though its business might bo actually run at a loss. • Under this inequitable system this bank alone will pay this year £58,841 over and above the assessment it made in the ordinary way were it merely a limited company; (2) that the bank has no intention of passing on the increase of 10 per cent, in income tax to which all taxpayers are equally subjected, notwithstanding the untenable basis of taxation previously referred to. This 10 per cent, increase amounts to £17,865; (3) that the increased note tax dates from July 1 last while the charge for keeping accounts dates from October 1 next. , The increased tax for this period which represents to the bank £13,5.00 is not being passed on; (4) that we estimate that this bank’s increase in note tax will not be less than £54,000 per annum whereas the number of accounts of the public kept by us liable to increased charge is under 85,000 representing at 10/- £42,500; (5) that as this bank is probably doing half the banking business of the Dominion it can reasonably be assumed that the total number of accounts assessable by the combined banks is approximately 170,200,000 and not the wild conjecture of one member, 400,000,000. May I further state that rather less than one-half of this bank’s profits last year were carried inside the Dominion and of New Zealand earned profit £152.602 was not taxable, being interest on our holdings of ‘tax free’ 41 per cent. War Bonds. The sum of £33,950 was also exempt from taxation, being the bank’s contribution to the officers’ pension fund and to widows. To clarify the position may I ask you to be good enough to take the earliest opportunity of submitting to the House the facts as herein set out and should honourable members care to question me on the subject generally, I am at their service.”