POSTPONED.

Auckland Star, Volume LIX, Issue 235, 4 October 1928, Page 21

POSTPONED.

FILM RENTERS' TAX.

SCHEME OPERATES UNFAIRLY.

A DIFFICULT POSITION.

(By Telegraph.—Parliamentary Reporter.) WELLINGTON, Wednesday. A one-clause amendment of the Cinematograph Bill, introduced by Governor's Message in the House to-night, has the effect of postponing for one year the provision that 12$ per cent of the gross receipts from film renting companies shall be taken as the amount of their assessable incurnc. The Prime Minister explained that since the bill had been passed there had been communications and those with New Zealand capital and from outside, showing that the scheme would operate unfairly. The (jovernment desired to give some preference to New Zealand lilm companies and those with New eZaland capital trading iu the Dominion, but these organisations stated that the scheme would have a detrimental effect. He must frankly admit that the position was difficult, and that he could not feel altogether satisfied that the plan was fair. Therefore, it was proposed that this clause should be postponed for one year to give opportunity of getting full information. Mr. Wilford: You could make it 7£ per cent for British films. The Prime Minister: Even that does, not work out right. It had been suggested, continued the Premier, that the Commissioner of Taxes should have certain discretionary powers which he exercised under prosent law, but this was considered dangerous as applied to the present instance. The companies would pay ordinary income tax, but the bill would definitely operate next year unless- Parliament altered the incidence of taxation. Mr. Wilford: The quota has gone too. Mr. Coates declared that the quota definitely stood, but renters and exhibitors voluntarily agreed to carry it out; otherwise it would be enforced with penalties under Order-in-Council. Mr. Howard (Christchurch South) asked why the film industry and not other industries should be taxed 124 per cent. It seemed that the Government was saying to the film industry, "Yon are making profit enough to pay 12J pei cent," and that was arbitrary and unreasonable. ' The Minister of Finance, th< Hon. W. D. Stewart, said 12J pei cent was a very moderate tax, perhapi too small. It had been suggested that i it were shown that anyone was earninj profits which should pay more than 12 per cent, then the Commissioner of Taxe should have power to collect more, and if anyone was earning less there should be discretionary power to collect less than 12& per cent. However, the Minister was satisfied, after going into the question thoroughly, that the power to collect less than 12J per cent would be very dangerous. The Commissioner of Taxes might be satisfied that one company should not pay 12J per cent, but might be uncertain about another company claiming to be in a similar position. Such power would be dangerous, although power to collect more than 12£ per cent was not dangerous. In cane of non-resident traders it was very difficult to ascertain the true position, and it had been claimed by some in a small way that they could not possibly pay 12$ per cent. Since the position was so complicated it seemed better to hold over operation of the taxing clause for twelve months in order to discover some equit able method without giving way on the whole thing. Mr. Howard commented on the fact that proposals introduced last year for a tax on films at the rate of 3d per foot would have yielded £80,000. Then this year's bill, as introduced, would have returned £29,000 to £30,000 annually, but when it came back from the special select committee it meant only £5000 to £6000 revenue. The basis of tho tax was wrong, because Parliament was legislating to make every company make 124 per cent profit. The Prime Minister explained that so far as renters were concerned many.of them had no capital invested in New Zealand, and they could reasonably be expected tti pay on a somewhat different basis from other traders. The amendment was read a first time.