COLLECTION OF TAXES

Press, Volume LXXIV, Issue 22506, 14 September 1938, Page 12

COLLECTION OF TAXES

POWERS GIVEN TO COMMISSIONER RETROSPECTIVE CLAUSE CRITICISED CONTENTIONS OF MR COATES 1 From Our Parliamentary Reporter.] WELLINGTON, September 13. Criticism of the power given to the Commissioner of Taxes under a special section in the Finance Bill to collect arrears of land and income tax resulting from retrospective changes in the law was voiced by the Rt. Hon. J. G. Coates (National, Kaipara) during the second reading debate on the bill in the House of Representatives tonight. “I do not know whether the Minister for Finance realises the power which he is giving to the commissioner.” said Mr Coates. “The Minister suggests that the latest amendment refers only to companies which have moved their balance dates forward from March 31 in any one year. Be that as It may, the effect of the clause is far-reaching. “Notwithstanding any act previously passed by Parliament, the commissioner can go back as far as he likes, and collect arrears of tax under the law as it is now amended. The Minister for Finance (the Hon. W. Nash): Hear! Hear! Mr Coates: The Minister agrees? Mr Nash: We will find out what the taxpayer should have paid, no matter how far we go back. - "The amendment refers to individuals as well as companies,” said Mr Coates. “The commissioner can pry into the accounts of every taxpayer for the last 40 or 50 years. The Minister is looking for extra revenue from taxation, and the commissioner is being given complete power to over-ride the law.” Mr W. P. Endean (National, Parnell): That is monstrous. Mr Coates: If it’s not dictatorship, I don’t know what is. A Commission Suggested People were entitled to some security under the law, Mr Coates continued. In spite of what the law might have been in the past, the commissioner was being given power to go back and assess past incomes.xand charge additional tax on them if, in his opinion, taxation had been .evaded. Such a provision cut the ground away from all previous legislation. “Can anyone say that commissioners in the past have shown favouritism. | and allowed evasion?” Mr Coates asked. “It is not our duty to deal with cases which have slipped through the net. If the law is faulty, it is only right that we should prevent future evasions; but we have no right to make a retrospective application. What is actually in the back of the Minister’s mind? Is it the necessity for grabbing all the revenue he can this year in order to square his accounts?’ Mr Coates said that when the clause was reached in committee he proposed to move an amendment to have it referred back to the Government. The proposals, as they stood at present, would cause widespread concern and lack of confidence in taxation methods. The Government would be well advised to set up a commission consisting of. a Judge or a Magistrate, and two former Commissioners of Taxes, and allow them to investigate the whole matter. Mr Nash: The amendment applies only to-cases where there have been changes in balance dates. Mr Coates; A great many farmers and country people have changed tnelr balance dates, in keeping with seasonal operations. , _ „ The Attorney-General (the Hon. H. G. R- Mason): Seasons do not change. "My honourable friend overlooks the fact that under this clause it is possible to go back any number of years, said Mr Coates. “The whole thing is iniquitous from start to finish. MINISTER IN REPLY “NOTHING SINISTER IN AMENDMENT” MR COATES’S VIEWS SAID TO BE FALSE [From Our Parliamentary Reporter.] WELLINGTON, September 13. The taxation proposals of the Government with regard to taxpayers who have changed their annual balance dates were defended by the Minister for Finance (the Hon. W. Nash) during his reply to the second reading debate on the Finance Bill in the House of Representatives to-night. The Minister referred to criticism of the relevant clauses in the bill which had been voiced by the Rt. Hon. J. GCoates, and said that the views which Mr Coates had expressed over the am were absolutely false and inc ° r ’ He was only sorry that, owing to the Se hour, he himself was unable, to refute the statements through the ra “The member for Kaipara tried to create the impression that In . co “ e returns may be examined right back through an unlimited period, said Mr Nash. “This shows that he has not read the bill. He may have read one proviso, in the clauses dealing with land and income tax; but he has certainly not read the rest. Power to g back through past accounts is exclusively confined to those bodies who protest against the new assessment. The relevant clause in the bill, said Mr Nash, amended the alterations made to the land and mcorne tax legislation last year It referred mainly to taxpayers who fixed then balance date at September 30, and who in effect paid tax 12 months later than other people. The provisions of last year’s bill made them pay th tax in the February following the balance date, instead of 12 months later. Previously they had had ii months’ grace; but that had been reduced to five months. In order to rectify the position, the Commissioner of Taxes, in certain cases, had to make provision for two assessments in one year. An examination of the accounts could only be made at the request of the taxpayer, for whose protection the clause was included. 11, after examination of the accounts, « was found that he would have paid less than the amount for which he was assessed, he would be entitled to claim a refund of the amount overpaid. If, on the other hand, underpayment was disclosed, an additional assessment would be made, “There is nothing sinister in this amendment,” said Mr Nash. “All it does is to ensure that the taxpayer is charged with paying tax on the profits which he is making,’’