TAXATION COMMISSION

Stratford Evening Post, Volume XXXXII, Issue 58, 6 May 1924, Page 3

TAXATION COMMISSION

Per Press Association. Christchurch, May 3. The Taxation Commission opened its Christcburch r.itting.

George Gould, the first witness, said that he wished to give evidence as to land tax and income tax, as far as it affected farmers. He thought that if the, rate was not excessive liuul tax was preferable to income tax for farmers, if only on the ground of simplicity and cheapness of collection. In assessing the farmers' income it was very ddficill toseparate living expenses and benefits derived from the'' farm from (he working expenses. lie considered that if the principle of graduated land taxation was adhered to some very necessary amendment? to the Act were required. Section 51 which imposed 60 per cent, ext.fr tax on unimproved land, was rmi*(? unworkable in its present form except by disregarding it. In Canterbury there" was mud light land that required little moie (ban fencing, to return its proper production. It would, he better ♦.> alter the clause to read: "TTnimpro"C.dland means land which on *) r-'iiit of lack of improvements is not productive to its reasonable capacity having regard to its situation and accessibility. a=, to which the Commissioner shall have fu'.l exercise of his discretion."

1:i regard to section SI J which debarred landowners froi.. co-operat-ing for their-mutual benefit., he considered it monstrously rnfair. Its repeal would not affect, tho principle of the Act. There was no reason why the benefits of co-operation should be denied to landowners and farmers. He always felt that it was unfair that when a large property was divided into sections amongst several children and was owned by them severally they should be debarred from working one property jointly.

and thereby economising in regard to working expenses..

In regard to section 52, which made a, freeholder liable to excess land tax on any property he leased, the tax should not be imposed if the freeholder felt, he could do more >n an adjoining piece of laud than the owner of that piece could do, and the owner of it had the same vio the freeholder should be free to do it. In that case the man with movs! ability and resource would make most out of the land, and that was a most important matter.

Another point ho wished to ; tion was the payment oi' tax Ly farmers on the amount of their mortgages. It was a sore point with every farmer 'that he had to pay land tax on the whole of his land when tin mortgagee probably was taking onethird or even one-half of the income derived from it.

Mortgage s should be deductible .for land tax purpose's, provided that the rate of the tax was based on the f unimproved value, 1-ut the deduction should have a limit. On a property worth £21.000, for instance, the graduated land tax would he £175. There should be. np to that point, full exemption for the amount of the mprt • gage. Beyond that probably the Commissioner could not affoi .1 to go. From that point onwards, up iO £IOO.OOO, there should be the same deduction in the tax of 2d in the £. It would mean that the large owner would have partial relief up to th2 amount of hi s mortgage, and the small farmer would get absolutely full exemption of the amount of hid .mortgage. lie did not think it would ho very expensive to the Commissioner to do ciat, and he was convinced that most farmers would feel that there was equity in it. Mr Clark, Commissioner of Taxes, in reply to Mr Could, said that, section 59, debarring, .landowners from co-operating was framed to defeat. actual cases of evasion of the A r :t when it waa first enforced. Mr Gould: 1 think it. was framed by a man with a bee in his bonnet. K a man takes his title to his land, as lie should, you will have no rtiffi- , eulty in getting hold of all his landJed interests'and taxing him accordingly.

J. D. Hall (president of the North Canterbury Farmer:;' Union) said his theory was that the land tax, which was inequitable, should be altered. There should he a.flat rate and an allowance for mortgages. A farmer should be taxed on bis income. not on his debts. In England a farmer was taxed on his incom \ Dealing with indirect taxation Mr Hall said the amount, paid by the farmer for land tax wa s small compared with the taxes which he paid indirectly, and which-were the main reasons for the increased cost of production on farms. That cosl was more than double what it was before the war.

W. H. Nicholson, secretary of the Canterbury Sheepowners' Union, sai.l his executive wished him to specially stress the point that the land tax, 'is at present levied, was a capital tax pure and simple, and it was imposed on one section of the community only. They urged that if a capital tax was found, to be uhv-im lr.We in order to provide means for meeting the expenses of the Government, that all capita!, however employed, should he made to bear its share equally with that used in working the land for production, so that some measure of relief might he given to primary producers. Charles Ogilvie, managing director of Beath and Co., drapers, suggested that profits passed to reserve in a business such as theirs should be treated on a lower scale of income tax with a view of conserving capital. The ultimate gain would he steady dividends and a steady income tax, so both shareholders and the Government would eventually reap the benefit.