TAXATION COMMISSION.

Star (Christchurch), Issue 17350, 15 May 1924, Page 11

TAXATION COMMISSION.

VIEWS OF SAWMILLERS. Before the Taxation Commission, A. Seed, .secretary of the Dominion Sawmillers’ Association, presented a statement which set out that the tax on companies’ profits should be levied on tho shareholders or the actual recipients of the income derived from such profits. The association supported the contention that by virtue of there being a large avenue of gilt-edge, taxfree investments (Government loans), and probably a larger avenue of lightly taxed investments (local body loans and company debentures;, not only were wealthy investors able to escape their just contribution to the State, and thus a heavier burden was placed upon companies and those in receipt of

‘ ‘ earned ” income, but the development of the Dominion and the community was retarded by th© discouraging investment in industries and development activities. Several factors in the present assessment were more severe in their incidence upon the sawmilling industry than upon any other industry. This was due to the fact that sawmillers were dealing with wasting assets, not only in th© bush, but in the mill, in fact, on every item on which capital was expended, with th© result that the industry was suffering a distinct injustice. Mr Seed said the unfairness of the present position would press unequally on different sawmiilers. Those who had a comparatively short period to run would the I it most heavily, whilst to those who had a long period of cutting in sight it would not be nearly so serious. Che inclusion of tramways in land valuation would furthermore result in some being locally rated on such tramways’ values while others situated where rating on unimproved value obtained would escape the charge. There was now no way by which deductions could b© allowed for the nxtig off of tramways other than by making no annual allowance for depreciation and writing off their whole capital cost in the year they ceased to be used. If the miller was allow-ed to write off exactly the correct amount for tramways each year he would still continue to pay his just share of income tax for such writing off would merely ensure that his actual profits were disclosed each year, and in the final year he would also profit instead of lose if the whble of the tramways were written off in the year of their abandonment. Substantially the same arguments applied to buildings. There was an additional hardship that the miller was compelled by law to provide accommodation for his workers. AU such buildings were iust as rapidly vanishing assets as the tramways.