INCOME AND TAXATION

Stratford Evening Post, Volume XXXIX, Issue 85, 15 August 1923, Page 5

INCOME AND TAXATION

BILL BEFORE THE HOUSE. AN ALL-NIGHT DEBATE. Per Press Association. Wellington, August 14. The second reading of the Land and Income Tax Bill was moved in the House to-day by Mr Massey. He explained that it was not the annual taxing Bill, but was a consolidating measure. The principal amendment in the existing law was the abolition of the income tax derived from agricultural land. This was originally imposed as a war measure, and as the necessity for this had now passed he proposed to repeal? ft. An alteration was also proposed in the method of computing the taxable income of banking companies, the alteration being in the direction of bringing the system back to that which prevailed under the old law. Under recent legislation the income derived by banking companies from debentures was separately assessed and debentures held by a bank were excluded (for the purposes of income tax) in the computation of its assets and liabilities. Tin's alteration of the law led to certain anomalies as between the soveral banks carrying on business in Now Zealand and it was accordingly advisable to restore the former law. Clause 116 sub-clause (4) and elapse 118 sub-clause (5) were merely declaratory and were fnseTted in confirmation of the alteration in the law effected in clauso P/f. (relating to tho computation of-the taxable income of banking companies). Section ?K of te 7920 Act provided fof ah additional tax as a penalty for late payment computed, at the rate of K per cent., 7* per cent o r 10 per cent according te the length of time the; tax was ovordue, but this Bill provides f "r a uniform rate of 5 per cent., as it bad found in that a varying' rate produced cases of hardship and that the additional revenue received did not compensate for the additional labor involved in its collection. He explained further amendments made by the PnH'c Account*, Committee, which were of a minor nature.

The Hon, J. A. Harm. fTnvercnrgllN said those who expected to find our oyofom of taxation remodelled °n scientific lines in this Bill would b»» disappointed. There was no reason for discrimination between the men in town receiving rent from land and n man in the country reoeivrnj? rent from the direct occupation and UPe of land. TT« said he desired to make it plain that he ohipcteo' to th<> exemption of both town and country taxpayers from income tax. Why should a, farmer ho relieved of income tax? No evidence was brought before the Public Accounts Committee to show that farmers were in a parlous position. They coulu afford to pav and should be made to pay. The bulk of the taxation in New Zealand came from the towns and this proposal to relieve farmers only meant that the towns would have to carry their share of the burden. This concession meant relief to nieu who were well able to pay. Mr. Hanan said insuffioent information was supplied to the House regarding the incidence of taxation. They were told that there were 4501) taxpayers who paid land and income tax, but they had no Information regardinc the income of taxpayers in the towns. He maintained that fuller returns should be given to members so as to euable them tu form wide views on the subject of taxation, if the people fully understood the proposals of the Government there would be a iouu outcry in the country, ine Premier bad been repeatedly teiimg tn«ui that he must have every penny, he couid get to meet national expenditure, and why then, he asked, should he'give avuvy the huge sum of money proposed iu this Bill. Under tins arrangement if a man maue £2d,UUO out oi his land ho wouid pay no income tax. Could that be justified? On the Public Accounts Committee the proposal to remit the income tax on the farmer was carried only on the caoting vote of the chairman. Mr T. M. Wiliord (Leader of the Opp-jsiuon) agreed with the proposal to do away with the income tax from land. The farming industry plainly wanted assistance. The income tax on land was a pure war measure and a s such it had played its part and he welcomed the opportunity of voting it out to-day. M r F. J. Rolleston (Timaru), referring to the concession proposed to bo given to payers of income tax on land, said he was against such a concession, because there were many important reforms to be effected before any remits.on in taxation

• was made. ! M r R. Masters (Stratford) sup'ported the Bill, which wa s m accordance with well established Liberal

principles. •The Premier, in reply, said the idea seemed to have been created that people in the country were being better treated than people in towns. That was absurd While he had been in charge of the Treasury j be had always tried to do justice : between town and country. Last I year's reduction in taxation bad i created no hostile comment, and be i was thoroughly satisfied we would i never pet the country back to normal j until w e were able to make further [substantial reductions in taxation. "But fo r last year's reduction we 1 would, Lave had a great deal more

unemployment, because high taxation consumed an employer's wages fund. The Government had in view a further reduction before the session came to an end. and ho hoped the amount would bo substantial The House then went into cuinmittoe on the Bill, and at 2 a.m. Was loft sitting. SITTING TILL DAYLIGHT. SOME CLOSE DIVISIONS, DILL PASSES THIRD READING. Per Press Association, Wellington, August IS. After the Telegraph Office closed, the discussion on the clause °* the Bill was continued ma ; nly by the Labour Party members, who reiterated their arguments against the concession in income tax as proposed in clause 78 until 2.1/5, when the clause was agreed to. The clauses clown to 78 were speedily passed. The real contest commenced when tbo Committee reached subclause L of clause 78, exempting from income tax income derived by any owne r of land in respect to profits derived from the direct use or cultivation thereof.

Mr McCombs moved to limit tho exemption to persons Ivning a total assessable income and exceeding £7- l >o, contending that this would cut out 1600 lartre landowners who did not need exemptif u

M r Massev contended that Ibw was treating largo landowners a* c-iminalß. and would re*»'a« Ae Bil« iwless. He had given a pledge when this tnx was imposed as a war measure that he would remove it as soon as tno country returned to normal, and he wa 8 not going to break that pledge. Mr Holland replied that no Government had' the right tj maxe any such pledge, and even if it had, the country had not yet returned to normal, and would not until the war dohts wore paid. On, a division the amendment was lost hv 32 to 31. Mr Veitoh moved to make the limit £IOOO. On a division, thiß was lost by 32 to 30. Mr Atmore then moved to maVo the limit £ISOO. This also was lost by 39 to 30. Finally, a sub-clause was added to the Bill, with mino r jimendements moved hy the Government, and the remainder of the Bill passed unamended, was read a third time and passed. The House rose at 5.16 a.m. till 2.30 p.m.