FINANCE BILL.

Colonist, Volume LVII, Issue 14130, 5 July 1916, Page 3

FINANCE BILL.

excess Profits duty

LOAN CLAUSES

BANKING I.EGISLATION

; Some of the provisions of sho ! Finance Bill with regard to the. excess •profits duty were published yesterday. j below will be fouim particulars supplied !by Sir Joseph Ward of other clauses of the Bill:— Clause 15 says: Notwithstanding anything in section 8 hereof excess pro-, litf? duty shall in the cases specified irJ the two next succeeding sections be cnarged as provided -in those sections. 16. Where the amount of the capital employed by the taxpayer in the production of his- income as at April Ist, 1915 (a) is greater than the average amount of -the capital employed by th© taxpayer during the three years ended on March 31st, 1914, in cases where the standard income is ascertained under paragraph (a) of section 10 hereof,, or (b) is greater than the average amount of the capital employed by the taxpayer during the two of* those years with reference to which his standard income is computed in cases where the standard income is'ascertained under paragraph (b) of section 10 hereof, or (c) is greater "than the amount of capital employed during the yesr in which the standard income is ascertained under paragraph (c) of section 10 hereof, there shall be added to and deemed to form part of the standard income an amount equal to '6 per cent, of the difference between the capital as at April Ist, 1915, and the capital employed in the production of the standard income, and excess Tvrnfits rln+.-sr clmll ha f.!inv^^i,u „_

17. Where the amount of the. capital employed by the taxpayer in the prorhiction of his income as at April Ist, 1915, (a) is less than the. average amount of the capital employed by the taxpayer during the three years ended ou March 31st, 1914, in cases where t'.tii standard income is ascertained i;r der paragraph (a) of section 10 !i reof or (b) is less than the average ji!i-.ount of the capital emploj'ed by the taxpayer during the two" of those years -with reference to which the .standard income is computed (in cases where the standard income is (ascertained under paragraph (b) of section 10 hereof), or (c)"is less than the. amount of capital employed during t'ho year in which the- standard income is derived (in cases where the standard income is ascertained under paragraph (c) of section 10 hereof), there shall be deducted from and be deemed not to form part of the standard income an amount equal to 6 per cent, of the difference between the capital as at April Ist, 1915, and the capital employed in the production of the standard income, and excess profits duty shall be chargeable accordingly.

1.8. In any ca?o in which the Commissioner is "satisfied that during the aggregate period of three years' ended ■on March 31st, 1915, a taxpayer carrying on any business the profits of which would have been assessable for incometax if the Land and Inc6mo Tax Act, 1916, had been then in force, has incurred a loss in that 'business, the; Commissioner shall in an assessment of i excess profits duty under this part of this Act reduce the amount of the excess profits by such fin 'amount as is sufficient to make good that loss.

19. For the pxirposes of this part of tins Act the assessable income of a banking company for any year shall bo deemed to be or to have been an amount bearing the same proportion to its • total income (whether derived •in New Zealand or elsewhere and whether assessable in New Zealand or not) as the average of its New Zealand assets and liabilities for the four quaa^-rs of that -year .'-according to the sworn statements pxiblished in the ''Gazette bears to its total assets and liabilities according to its 'balance sheet for that year.

20. (1) Notwithstanding anything in tho foregoing provisions of this part of this Act the following provisions shall apply in respect of income derived 'during, the income year from mortgages or from rent of land;- (2) In the case of such income derived from investments by way of mortgage, of land or chattels such income shall be deenced to be ex(!'o?s profits in so far as it is derived from any increase in the rate of interest since March 31st, 1914 (in the case of moneys invested on that date), and income so derived from other moneys shall 'be deemed to be excess profits in so far as it is derived from a- rate of interest, m excess of 0 per cwit. per "{.nnum. (3) In the case of such income; derived from ivnt of land or buildings such income p.hall be deemed to ho ox-cess profits in so far as it is derived from any increased charge for the rent since March 31st, 1914 (in the cose of 'and or buildings let on that date), and in the case of all other land or other l>rcildii.Rs shall bo deemed to be excess profits in so far as it exceeds a return of 6 per cent, on _tho capital value of such land or buildings, provided that in the. case of laud or buildings let on March 31st, KM, income derived from an increased charge for rent shall be deemed to be excess profits only in so far as it is in excess of any increase, necessary to ensure a return of 6 per cent, on any additional capital expended since that i dii to on the property from which the i income is.derived.

21. In computing ti-^ assessable income of a'taxpayer for the purposes of this part of this Act no deduction shall be allowed for depreciation from the stock-in-trade held on March 31st, 19J6, in excess of the average of the deductions (if any) made by the. taxpayer for depreciation from the stock-in-trade-held, on March 33st of each of the ■ -years 1912, • 3913 and 1914 respectively, and in any other ' case, no deduction shall be allowed for depreciation of stock-in-trade in excess of such amount as the- Commissioner thinks reasonable. ,

22. _ Where, in the opinion of the Commissioner, tho payment of the excess profits duty oh the date fixed for the payment thereof or the payment ot such duty in one sum would causa serious .hardship ho may allow such time-and terms for payment as. he deems reasonable.

23. In any .such case the due date of payment of such duty or portion thereof shall for the purposes of section 127 of the Land and Income Act, 19.18, relating to the 'payment of additional tax in case of default by taxpayer be the date fixed by the. Commissioner pursuant to this section as the date for the payment of such duty or portion thereof.

24. In.every ease in which the Commissioner extends the time for. paymontof excess profits duty he shall .cause a. record of his action with his reasons therefor to.be kept, and shall forward to the'-Minister-of Finance.without disclosing the names of the taxpayers a report ■''of- such cases for presentation to Parliament. -

?o. (!)• Salaries and wa^os shall i.ot ho. chargeable with excess profits duty. C 2) For the puipores ol" this section the term "salaries and wages'' includes any bonus, gratuity or allowance given or {flowed to a taxpayer in re(/oe<»y of his services, but docs not ipc-lude commission or sliare of the vjtoiils of any business or sums computed hy roforei'ict' to ffuoh prciits. 20. (1) I\q excess profits duty shall jjo c-liargod under this part of this'-Act in any ca^o v.-l^re the as<?eF.sablo income of the taxpayer is less than £'300, aiui i;i any n&irv case the excess prolibs dn'iy chargrH j-luill not exceed the amount by which the assessable income exceeds the sum of £300. (2) For the

purpose of computing the assessable iiscome under this part of thie Aet^no amount shall be deducted from the income of the taxpayer by way of special exemption tinder the Land and Income Tax Act, 1916, 27. Where for the proposes of this part of this Act it is necessary to determine the amount of capital employed by a taxpayer m the production of his income in any year such capital' shall bo deemed to 'be the amount of j capital as at April Ist of that year, and; shall also be deemed to be the difference '• between .the value of his assets em- j ployed in the pi eduction of his income and the amount of his liabilities incurred for the purpose of producing such income as on the-said-April. Ist. 28. The duties under this part of this Act shall he payable on such day or days and at such place or. places las the Governor in Council from time to time determines, .and shall be charged, assessed, lovied, collected; paid and enforced in manner prescribed by and upon assessments iwade under the Land and Income TVix Act, 1916. 29. For the purposes of this part of this Act "assessable income" means income which would'have been a'ssess^ j able under the Laud and Income Tax Act, 1916, if that Act had been in force; when such income was derived whether' such income or any part thereof was in ' feet actually assessable or hot WAR LOAN. Part 111. gives the Minister of j Finance authority for raising a £12,----1000,000 loan. This money or any portion of it may be raised on the security of Treasury bills, or may be raised by the Minister or Finance by agreement with the Tr..:v!)-v of the-Imperial:Gov-ernment without formal security or on such security as may be agreed on. All moneys raised under this section are to be placed t.r, credit of the \Viar Expenses. Account established under the Ptfbliti Revenues Amendment Act of 1914. The limit fixed by the Public Revenues Act of 1910 as' to the total amount that may be outstanding at any time in respect of Treasury bills shall not apply to Treasury bills issued for war purposes. Power is given for the renewal of Treasury 'bills from time to time by endorsement by the Minister of Finance or the High Commissioner: A clause is inserted to enable> the Minister of Finance to raise money or renew loans at rates of interest in excess of those stipulated in the authorising Act. This is made retrospective, the reason being that owing to the conversion proposals brought down from time to time by the Imperial Government the Minister is never quite certain as to the rfate of interest which New Zealand is actually paying for money which has been borrowed. The rates may at any time fluctuate, and may exceed the limits provided in the authorising Act. LAND PURCHASES. It is also provided that where power is given under any Act to puichase land for the use of the Ciown, the Minister of Finance on agreement with the vendor may issue debentures for the payment of same in lieu of ciish, and where under any Act power is given to acquire land compulsorily for the Crown's use the compensation payable or any portion of it may at the option of the Minister of Finance be paid in debentures, and any person entitled to such compensa-' tion shall be obliged to accept such debentures in lieu of cash. Debentures; y-ill bear interest at a rate not exceed- i ing 5 per cent. BANKING AND LOANS. Part IV. deals with banking and loans. | It is provided that, notwithstanding' | anything in the Banking Act or in the! charter of any bank carrying on business in New Zealand, the. Governor- | in-Council may from time to time make certain regulations, including the suspension, alteration or variation of the terms, conditions or restrictions relating to the issue of notes by any bank and the making of such notes legal tender in New Zealand.

Regulations may also be made i'or altering the amount of the reserve of coin, bullion Snd public securities provided to be held in New Zealand by any bank against the debts, engagements and "liabilities of such bank, and for providing that bank notes of the domination of 10s may be lawfully issued in New Zealand. " '

In this part of the Bill the Governor-in-Oeuncil is given power to mako regulations regulating the rates of interest that may be paid on moneys invested in New "Zealand by way of fixed deposit or by mortgage. ; In .Part V. of the Bill the Minister of finance is empowered to raise £1,000,000 (bearing interest at a rate not exceeding 4-?r per cent., such money -to be padd. into the Public Account to [the credit of the Public Works Fund and to be used for public works. Part VI. provides that no stamp duty shall be payable on any power of attorney executed by any person who is a member of the Expeditionary l''orce. PUBLIC TRUST OFFICE, Part VII. deals with the Public Trust Office. It is provided that where the estate of a deceased member of the Expeditionary Force under the administration of the Public Trustee is of less value than £100 it may be distributed or conieyed and dealt with without the prescribed notices being given as laid down in the Public Trust 4ct. Provision is also made that where the net profits of the Pufblic Trust Office in any year exceed the sum of £20,000. the Governor-in-Council may direct that such profits or any part of them be credited pro rata as a bonus to each estate or account in the office. Part VIII. provides that "when money is deposited in the Post Office Savings Bank for a fixed term the PostmasterGeneral may permit withdrawals before the expiration-, of the term.. The rate of interest on money to withdrawn is! not to exceed 3 per cent. This clause1 is designed to allow of the temporary investment of patriotic funds.