BUDGET PROPOSALS

Dominion, Volume 9, Issue 2816, 6 July 1916, Page 6

BUDGET PROPOSALS

OPINIONS OF THE BILL

BY CHAMBER OF COMMERCE

On Tuesday afternoon tho council of the Wellington Chamber of Commcrca considered tho Finance Bill, and yesterday tho secretary issued the following statement— The Council recommends:— (1) That a Board of Appeal (constituted, say, of a Judge of tho Supreme Court and two business men) be sot tip to deal with any appeal from the decision of The Commisioner in regard to tho assessment of excess profits, and that such board have discretionary power to vary the assessment of excess profits. Memorandum: It is realised that tho question of assessing excess profits is an extremely intricate one, and it is conceivable that there are individual cases which cannot be specifically provided for in the Act, and where undue hardship would be imposed. It is, therefore, recommended that a board should bo constituted which would have power in such cases to ascertain the excess profits mado by the taxpayer. Under tho Imperial Act a board of referees has been constituted.

. (•2). That clause 10 (d) defining "standard income" should bo varied to tho extent that. 6 per cent, on the amount of |capital employed should be.altered to 8 percent:' in tho case of'uh ordinary'taxpaver- or trading company, and to 10 per cent, in the case of 'a compauy or taxpayer working a "wasting asset." such as'a-' coal miDe or timber area.. Memorandum: It should be poiuted'ont that many, companies' average rate of, income under sub-section, (a), (b), or (c) of clause 10 is considerably more than 6 per cent, on tho amouiit Df capital employed, and that companies which liave not mado this rate of profit in tho past, or new companies, are at a disadvantage compared with older established

"nanies. Further, that companies working a "wasting asset" require to make sufficient profit to enable them to repay out ot their profits, interest on tho capital outlay, and a proportion of the capital outlay. .

(3) That tho Government should consider the advisability of taxing the dividends of companies whose principal business is tho -working of a "wasting asset," such as coal-mining and sawmilllng companies, instead of treating such companies as ordinary,trading companies, and imposing taxation accordingly- '

(4) That clause 20 should be varied to tho extent that in cases of second mortgages on land" nnn! mortgages on chattels, the rate .of interest allowable before excess profits are charged slionld b» 8 per cent. Memorandum: The rate of interest on o, mortgage varies with the nature of the security, and in raany cases money is lent oil second mortgages and chattel securities at 7 per cent, or S- per cent., these' being fair rates of interest in view of the risk involved.

(5) That in clause- 20, sub-section 3, the return of ,6 per cent, on the capital value of land or buildings should be the net return,, that, is after allowing proper deductions for repairs, depreciation, and other outgoings. (G) That the attention of the Minister of Finance lie drawn to the. fact that British companies trading in New Zealand will bo charged 45 per cent, war tax oil excess profits in New Zealand, and again taxed in England to tlie extent of CO per cent, on the residue, nnd that this council recommends that some arrangement should be entered into with the Home Government to prevent such double taxation.

That the above resolutions bo referred to thn executive of the association of Now Zealand Chambers of Commerce to lie considered with- tho recommendations from other chambers of commerce and kindred associations, with tlie. object of bringing them to tho notice of the Minister of Finance.