What Taxes Must We Pay?

Te Ao Hou, Summer 1953, Page 53

What Taxes Must We Pay? The Government has now made clear what taxes it expects the Maori farming organisations to pay. Towards the end of 1951 an impression existed that these organisations had evaded their taxes, and a Royal Commission was called for to investigate these alleged evasions. The Commission made it quite clear that no wilful tax evasion had occurred, and that the Maori people of the East Coast ‘really believed that they were enjoying taxation immunity with Ministerial knowledge and approval, and with the apparent acceptance of that position by the Commissioner of Taxes.’ Although reputation was saved, this belief in immunity was definitely shattered. At the same time the Commission made it clear that the 1939 Statute under which tax had been payable was quite unworkable. The clerical work expected of the Maori organisations under that Statute was beyond what could reasonably be expected. Accordingly, the commission made three recommendations. A new Act should be passed by which taxation would be assessed in a simpler and more reasonable way, suited to Maori organisations, with their enormous number of small owners. Taxes in respect of income earned before March 31, 1950, should be treated as irrecoverable. Taxes in respect of income earned between that date and March 31, 1952, should be recovered, but no penalties charged for past failure to pay such taxes. Legislation was passed during the last session, following the publication of this report. This legislation, in the main, followed the Commission's recommendations. It defined all Maori Incorporations and other organizations farming Maori land in trust for the owners (such as the Board of Maori Affairs, for instance) as Maori authorities. These Maori authorities are expected to pay tax in future on a basis too complicated to set out here in full. Where the number of beneficiaries of a Maori authority is twenty or less, each owner's share of the taxable profit forms part of his personal income, irrespective of how much is distributed. Where the number of owners is more than 20, there are two forms of taxation. The owner is assessed in his own name on amounts distributed to him. If there is also undistributed income—that is, if the authority makes profits which for some reason it does not distribute, these profits are taxable, too. For 1952 the rate is 2s. 6d. in the pound, plus 5 per cent. Social Security Charge on taxable profits is paid by the Authority, irrespective of owners.