The Waikato Times With which is incorporated The Waikato Argus. TUESDAY, FEBRUARY 15, 1921. OVERDUE INCOME TAX

Waikato Times, Volume 94, Issue 14591, 15 February 1921, Page 4

The Waikato Times With which is incorporated The Waikato Argus. TUESDAY, FEBRUARY 15, 1921. OVERDUE INCOME TAX

* ■ The Canterbury Chamber of Commerce have circularised other Chambers with reference to the terms offered by the Commissioner of Taxes in order to meet the case of firms who have difficulty in paying the tax at the due date. The whole position is peculiar. The importations have been unusually heavy from accidental causes. It, may be said that the merchants are responsible for litis, but in many instances it is not their fault. Goods which had been on order for long periods were rushed forward in consequence of the diminished demand in Britain. The importer'was called on to pay an amount of goods which he would commonly.have spread over a considerable period. In addition, he was often asked to pay cash where he commonly got 60 days or 70 days' credit, and this arose from eircum.slances quite beyond his controlnamely, the exchange difficulty created in part by Ihe cessation of Die demand for wool. On the top of these difficulties came the compulsory loan, and firms had to purchase bonds at £IOO each and were compelled to sell them at what they would fetch, which is at present about £9l, but has been less. Then came the income lax, and importers hoped to get some extension of lime for the'payment, and a deputation waited on Mr Massey, who said that he had no power to extend the time and lake payment as they asked, one half

each on January 3 1 and July 31. The Chamber of Commerce now finds that (lie matter was left entirely in the hands of the Commissioner of Taxes, and they are indignant that they should be put in the position of suppliants to liny civil servant; and also because they consider that, the terms he demands are harsh and unreasonable. He is prepared to accept payment one-half at iluc date, the balance in one bill at three months, or two bills at three and

six months. To the amount of the tax ,p;;id by bills 15 per cent penalty is to he added, together with 6J per cent, to cover discount and also exchange on bills payable elsewhere than in Wellington. In addition the bills must be endorsed by the taxpayer's bankers. On payment of the bills the penalty of 15 per cent, will be refunded. These terms can only be accepted by the Commissioner after arrangements to that effect have been made between him and the individual taxpayer, who is to be made fully aware of his ignominious position. It is. of course, imperative that taxes be paid. Nevertheless, it cannot be good either for the Government or th" country to force a number of reputable firms into bankruptcy. The Commissioner demands that the taxpayers' hankers shall endorse the bills, but as he will only accept bills from those who cannot obtain the required advances from their banks, it is difficult to see how the hank guarantee can be had. I*' the Government discount the bills, which they say must be done to bring in the revenue by March 31, it is clear that the banks have funds sufficient to enable this to be done, but that they are not prepared to go any further with the firms who arc in trouble over their tax: but if they will nit make further advances, what reason is there to think that they will endorse bills? In any case it is certain that I hey will ask a commission for doing so, and this will be added to the other charges to be paid for accommodation. The settlement proposed seems to be based on the dealings of the Supreme Council with Germany, and this is certainly not the spirit in which it should be regarded. Mr Massey would have done better to take it in hand himself rather than refer it to the Commissioner, who evidently holds the departmental conviction that taxpayers are rogues. It is, unfortunately, true that men do n'ol observe the same standard of honesty in dealing with the Department that they do in transactions with their fellows, but to a certain extent the Department is responsible for this. It is suspicious, and inclined to drive a hard bargain. Those taxpayers who are now obliged to pay heavily for their temporary difficulties will be looking for the chance to recoup themselves, and when the wits of the Department are set against those of the public it is safe lo say the latter will be successful. It would have paid the Department better to have treated the taxpayer as a merchant would deal with a good customer who was lempor; ! lv hard up, and it

would have been infinitely more dignified. The action of the Government in assisting to hold up wool and in floating a compulsory loan is largely responsible for the stringency in the money market, and it is hard, therefore, to treat men who are suffering from that stringency as if it was their fault. We have often urged that the system adopted by the Department of waiting until Christmas before issuing notices of the amount payable, and then following up Ibis notice in a month's time with a demand that payment be made in a fortnight from date is bad business, and that it should be altered. The Department, get their returns in from taxpayers by the end of .Tune, and should issue their notices by the end of September. Payment could then he made, in two Instalments, to the benpflt of both the Government and the taxpayer. The Chamber of Commerce ask for a Royal Commission to enquire into the proper principles of taxation. This is a muchdebated subject, and we are afraid it Is beyond the powers of even a Royal Commission to settle it satisfactorily.

A Commission io enquire into tlie workings of the Department might lie of benefit, " A change of spirit, however, is even more necessary than a cliang' 1 of methods, so long as the Department proceed on .the assumption that all men are dishonest, so long will they find it true in a very large number of cases. Confidence begets confidence. By all means observe the ordinary business checks, but do not seize an occasion like the present to deal harshly with income tax payers, wlmse contributions have risen in live years from EfiOO.ooo to E 5.600.000, and will probably be larger still for the current