INCOME TAX & EXCESS PROFITS

Dominion, Volume 10, Issue 3061, 24 April 1917, Page 11

INCOME TAX & EXCESS PROFITS

CHAMBER OF COMMERCE REPORT

"HARD ON YOUNC BUSINESSES."

• Tho annual report of the Wellington Chamber of Commerce, in a reference to the income tax and excess profits levies were made under the provisions of the Finance Bill, in the Minister of Finance's second War Budget states, reviewing tho history of the measure:— "The Act has undoubtedly proved to have been unfair in its operation so far as the taxation of profits from young and progressive businesses has been concerned, tho percentage of tax collected from many such concerns being disproportionate to that collected from older-established businesses. It is sincerely hoped that if this system of taxation is to be continued during the current' year, some more equitable method will be devised. In many cases what has been collected has not been the proportion of income derived'from transactions which have been profitable as a result of war conditions, but rather a proportion of profits consequent ou tho natural expansion or progress of tho business which under the provisions of tho Act have legally been deemed 'excess profits.' It is not questioned that taxation at this time must be heavy, but it is an accepted principle of all taxation that it shall bo equitable in its incidence; it is considered in many quarters that tho provisions of the Act regarding tho taxation of 'excess profits' have not carried out this golden Title, and as a consequence have inflicted hardship in many cases. "However hard tho provisions of tho Finance Act were on somo businesses, they were muoh more onerous on those companies which had establishments both in the United Kingdom and in tho Dominion. Under the Imperial Act they were required to pay 60 per cent, of tho excess profits on incomo earned in both tho Home in the Dominion, while in the Dominion they were asked to pay '45 per cent, of the excess profits earned in Now Zealand. "The Minister of Finance embodied a clause in the Act empowering him to negotiate with the Imperial authorities to permit of an apportionment of excess profit duty between tho Imperial and New Zealand Governments. . It would appear from tho newspaper jeports that lie has made representations, but, so .far as can bo learned, has met with.little success.

"The very vexatious matter of double income tax payable by companies operntinc in the several Dominions and also in the United Kingdom, has been brought before the Imperial authorities by .the Prime Ministers of the several Dominions who have lately visited England; and it is sincerely hoped that some working arrangement will bo come to between the Homeland and the Dominions to alleviate this unfair' burden.

"For many years past profits derived from tho land' \ave been exempt from income tax. The Finance Act, 1915, altered this method, and introduced special' provisions for tho taxation of tho income of producers. The Budget figures of the Minister of Finance showing tho comparative amounts collected are interesting. The total Teceipts from income tax for 1915-16 were £1.392,1]9,and the income tax'chnrgeablo to farmers included in the above amounted to £269,000.