8.—6.

with the relative legislation, 92 per cent, of the net petrol and mileage taxes, together with penalties, is transferred to the Main Highways Account, while the remaining 8 per cent, is paid to boroughs. Thus the heading " Highways " is for all practical purposes " self-balancing," and on reference to the estimates it will be noted that the revenue under this heading is offset by a corresponding amount of expenditure. The only other importai it variation under the heading of taxation is income-tax. Last financial year, as published statements have already indicated, the revenue exceeded the estimates by the substantial total of £1,579,000. This total was accounted for in part by payment of some £640,000 arrears owing in respect of previous years. Collection of these arrears had hitherto not been possible because of the financial difficulties encountered by many taxpayers whose prosperity has since been restored by the introduction of more stabilized conditions and the gradual improvement in manufacture and other industry since 1935. The total was also augmented as a result of active measures by the collecting authorities with a view to preventing evasions by those not disposed to meet their obligations voluntarily. With no increase in the rates of taxation, I feel justified in estimating the taxation receivable during this financial year at £9,500,000. 1 would add that in arriving at this estimate due allowance has been made for the fact that more liberal provisions for the granting of relief to those to whom payment would cause hardship were placed on the statute-book at the beginning of the present year. The remaining headings of revenue consist of " Interest" and " Other Receipts," estimated at £1,955,000 and £2,175,000 respectively. " Interest " in this connection consists of recoveries from the Government Railways, representing the net surplus of revenue over expenditure for the year, interest on the capital liability of the Post and Telegraph Department, interest on Public Debt Redemption Fund moneys, together with dividends on the Government's holding of Bank of New Zealand shares, and miscellaneous items of which full details are published in the accounts. The revenue which has been received during the first quarter of the present financial year indicates that to date the estimates are being very closely adhered to, and I am satisfied that they have not been computed on too optimistic a basis. A summary of the position is as follows : —- Revenue. Taxation — £ Customs .. .. .. .. 10,000,000 Beer duty .. .. .. .. 1,000,000 Sales-tax .. .. .. .. 3,400,000 Film-hire tax .. .. .. 100,000 Gold-export duty .. .. .. 100,000 Highways .. .. .. .. 3,200,000 Stamp and death duties .. .. 3,300,000 Land-tax .. .. .. .. 1,075,000 Income-tax.. .. .. .. 9,500,000 Miscellaneous .. .. .. 40,000 £ Total taxation .. .. .. .. 31,715,000 Interest recoveries .. .. .. .. .. 1,955,000 Other receipts .. .. .. .. .. 2,175,000 35,845,000

Income-tax,

Revenue, 1938 39.

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