TAX ANOMALIES

Waikato Times, Volume 127, Issue 29241, 11 October 1940, Page 6

TAX ANOMALIES

BILL TO RECTIFY S 3 _ FIRE INSURANCE SAFEGUARD HOUSE HURRIES BUSINESS (By Telegrapn.—rress Association) WELLINGTON, Friday The removal of anomalies in the existing taxation law is the main purpose of the Finance Bill No. 3, which was introduced in the House of Representatives today. Provision is made to give temporary relief from income tax to proprietary companies establishing new industries in the interests of New Zealand. The Minister of Finance is empowered to grant relief for any period up to 10 years from the date of incorporation. Steps have been taken by another clause to correct a mistake in the schedule to the Land and Income Tax Amendment Act passed earlier in the year. It was explained by the Minister of Finance, the Hon. W. Nash, that companies and public authorities with incomes of over £6600 were inadvertently being assessed at l-150th too much on the £6600 itself, while the extra rate was really meant to apply to income in excess of that sum. He added that no money had been collected under the erroneous clause. Tax Adjustment Another clause is designed to adjust liability for the social security charge and national security tax in cases of persons paying on other than salary or wages since 1931. The object is to prevent these persons from having to pay for a year longer than those paying on salary or wages. Companies with preference shares at a fixed rate of dividend are authorised to deduct Id in every lOd of dividend so as to recoup themselves for national security tax, as well as the social security charge. They were authorised in 1939 to take off Id in every Is Bd, but the introduction of the national security tax has necessitated this change.

Public Servants’ Salaries The payment of a cost of living bonus to public servants is validated. Restrictions are placed on the transfer of shares in bondholders’ companies. The Minister explained that directors were empowered to refuse to register the transfer of shares where it was known that the price paid for the shares was unconscionable. The object was to protect people who might be induced to buy shares at a price far above their value. The bill was read a first time. In reply to a question by Mr W. A. Bodkin (Opposition—Central Otago), who asked if the Government would take steps to increase the salaries of those employees in the Post and Telegraph Department known as “depression juniors,” the Prime Minister, the Rt. Hon. P. Fraser, said the matter was under consideration. Urgency For Bills Urgency was granted the passing of the Insurance Companies Bill, the Small Farms Amendment Bill and the Finance Bill No. 3, tne lastnamed having been introduced by Governor-General’s Message this morning. In moving lor urgency Mr Fraser explained- that this would enable the House to complete consideration of these measures today should it be necessary to continue the discussion after 5.30 p.m. The Leader of the Opposition, the Hon. A. Hamilton, urged that the passing of the Small Farms Bill should not be unduly pressed, as members had scarcely had time to give it full consideration. Mr Frase.r intimated that this aspect could }/*. discussed when the secohd reading stages of the bill were reached. Policy Holders Guarded Moving the second reading of the Insurance Companies Bill, the Minister of Finance, the Hon. W. Nash, said the purpose of the measure was to ensure that policy holders would knew that the money they paid in premiums would be completely at their disposal to cover risks they took under circumstances of fire or other hazards. The bill provided in the main for the expansion, extension or increase of the amount of money that must be lodged by companies with the Public Trustee, as a deposit to ensure safeguards for the policy holders. The bill was rapidly put through the remaining stages with very little discussion and passed. The Finance Bill No. 3 passed the second reading after a very short discussion, went through the committee stages and was given a third reading and passed. The adjournment at l p.m. interrupted the second reading debate on the Small Farms Amendment Bill.