WAR PROFITS TAX.

Press, Volume LIII, Issue 15989, 25 August 1917, Page 8

WAR PROFITS TAX.

REASONS WHY IT SHOULD BE REPEALED. OPINION OF COMMISSIONER OF TAXES. (SPECIAL TO "TOTS TOESS.") WELLINGTON, August 24. The Minister of Finance, in th® House of Representatives this afternoon, read tho following letter from tlio Commissioner of Taxes, giving reasons why the war profits tax should bo ropenled: — Tho collection of land and income tax and excess profits duty for tho year ended March 31st lust yielded £4,070.'213. run do up as follows: — £ Land tax ... Ordinary inconic tax ... 1,G56,704 Special tax undrs secxion 0 ••• 762,475 Excess profits tax ... 1.562.946 Total .... ... £4,975,243 From this it will be seen that tho excess profits duty, in spito of tho sanguine predictions that wort* made by many persons as to its yield, some rcaching £7,000,000, fell short of tha estimate by £140,000.

It is true that with the amounts paid since March 31st. and those still to bo paid, we shall just about rench tho two million, but then thero is always a certain amount of tax uncollected nt the ond of a financial year. . If tho tax is to be continued this year. 1 would not venture to estimate the yield at more than £r,200,000, while if the modifications and concessions that aro sure to be demanded whon i t comes before the House again are granted, an estimate of £1,000.000 would not be safe. modification is required to romovo present inequity cannot bo denied. J* this country there is naturally a fni\ larger proportion of undertakings iir course of development than in the : older countries, and these' by reason of tho absence of a normal standard income, are taxed out of all proportion to the actual income earned when compared with established undertakings with a normal standard. In many of the former cases tho tax paid amounted to upwards of 33 J per cent, of tho assessable income, while in many of tho latter the percentage was only half that. Tho worst aspect of this, in my opinion, was that in a largo proportion of the latter eases the taxpayer was quite willing to pay more. Many of them told me that thov did not consider that they were heavily taxed enough, and two or three actually paid in amounts tin to £200, which thoy considered they should pay, but which, under the law, I was not entitled to collect.

In tho attncliccl schedule I have given a year's illustrations of tho inequalities referred to aboro. The, difficulty is to fix a standard which,' while it resulted in an adequate assessment of established concerns, would not penalise those in process of development. I see no way out of tho difficulty. Thinking of this brings to mind another objectionable feature in connexion with this tax, and that is tho discretionary powors vestod in tho Commissioner. You will remember that I objected on principle to this last year. My experience since then has •.•ortainly not weakened my objection. It is not right that sui individual, or even a body of individuals, .should have the power that I havo under the present Act to fix in camora assessment of tax. Tho underlying idea of tho Act, viz., to appropriate :i poi tion of profits duo to war conditions, is admittcdlv a good one, but •this tho Act has failed in many onset* to do. To assess actual war profits would require a procecluro aud machinery 60 elaborate that in normal times if would be slow and difficult to operate, and undor present conditions impossible. Even the present method of assessment, simple as it is, compared with what it would bo if wo had to assess actual war profits, imposed & verv severe strain on the depleted 6tan. For this reason I could not recommend the suggestion of having an alternative schonio whereby we might tako either income-tax on excess profits according to which gave the greater amount. Such a schomo would increase rather than lessen the work, and Y"®' 0 promptitude in the collection of "h® rovenuo is essential, it is important that tho scheme of assessment and collodion should not be so involved as to cause delay. There is the further objection that it would increase tho uncertainty of the taxpayer as to tho amount ho would have to pay. To summarise, my objections to the excess profits tax are That I do not think it will yield the revenue obtained last year, and that its incidence is too erratic and inequitable ; That xlo 'reliablo estimate _of the rovenuo to be obtained from made, and that more especially in view of the modifications that might he made; That too much discretionary poweris required to denl with the large num"ber of cases to which no fixed rules will apply; , . That a graduated land and incometax can be more accurately estimated, ' and is more equitable in its incidence.

SIR JOSEPH WARD'S COMMENTS. (SrUOTAIi TO "the press.") WELLINGTON", August 24. Criticising the allegations of some people in regard to war profits, Sir Joseph Ward, in his speech to-day, stated that there had been a greater export of stock in the years of the war than in pre-war years. This lait vear easily one million more of stock had been exported by farmers than in any pre-war year. Thore were people who, when they saw that amount ; added to previous years' exports, saitl it represented a profit. Its export was really a withdrawal of capital. Last year the total value of the exports from New Zealand was thirty million. Did anyone believe that that amountrepresented war profits? He did not believe that anything like that amount comprised war profits. A man could not grow wool and meat for nothing. - If a man were averaging ten per cent.-/"w- i on the whole of his exports he wasf Ml doing very well. There would vk. many people in the country who would i be glad to realise a two and a half / per cent, increase on their profits one f : to the war. Ho knew of export mcr- f chants who were not realising one per [ cent, increase on their profits. < STOP-IT, Loasby's Mighty Cough Cnnt la 6d. 2s Cd, and 4s 6d (larger bottles ai» tho cheaper). Ask your grocer which is the bcfit-selliug Cough Cure, and ho will tell yon Loaaby'e "Stop-It." It sells because it i* good. It is composed of all the oest-known remedies for coughn and colds, skilfully blended in a menthol boeo. You feci M soothing influence on the throat and bronchial tubes immediately. It stop* tho congbj loosens the phlogc, and reduces all traces of inflammatory trouble. No couph medicine . can do more. Xo other will do it as quickly aL sffectui'.lly as Loasby's "Stop-It." "rftop-It" suits all ages, young or old. 1* curcs quickly and is pleasant to take. Children liko it. Obtainable from all Chemist® and Grocera, or post free from A. M. LOASBY (with W. F. MeArthur). the Only Prescribing Chemist, 673 Colombo Chriotchurch. Ue24a