WAR TAXATION

Dominion, Volume 10, Issue 3176, 29 August 1917, Page 4

WAR TAXATION

POINTS OF THE BILL NOVEL AND DRASTIC PROVISIONS FINANCE MINISTER'S PROPOSALS; The Finance Bill is novel, drastic, and far-roaching, and constitutes u. record in financial legislation in New Zealand. It abolishes the old system of graduated laud tax, ordinary income tax, and the experimental excess war profits tax, and substitutes a progressive land an<l income tax, a special war tax on alt taxable incomes, nn amusement tax, and a further increase in beer duty. The additional increase in the beer ihily is equal to one penny per gallon. The Bill provides an increase of as. par week in old-age, widows', Maori ■Warpensions, and also in pensions for miners suffering from pneumoconiosis. The amusements tax affects all amusements, athletic, and other sporb aud. race meetings. Admission tickets up todxpence each are exempt. Under the land tax a remission is given to small farmers in respect of deduction for mortgages. This is estimated by the . Minister of Finance to equal from XBO.OOO to .£IOO,OOO. Half the rate of tho land tax only is to be paid on land held by religious societies exclusively for religious or charitable purposes, and. on land held T>y sports bodies. ■ Under the progressive income tax a. deduction from income is to be allowed for tho sale ot removal of timber. This , removes a long-standing grievance and hardship. A deduction of i\ per cent, is allowed! for depreciation of brick buildings, and i per cent, for wooden buildings. Naval and military pay earned beyond New Zealand is not to be assessable for income tax. A rtifund of taxation may be made to small shareholders in companies. There is drastic provision for compulsory subscription to the New . Zealand War loan, but allowance may bo made in respect of contributions to patriotic funds. . . ' The penalty for failing to comply with, those compulsory provisions is an additional tax equal to double the total amount of the offender's land and income tax exclusive of laat year's excess profits duty. . The provisions dealing with Customs ari3 excise duties may be made applicable to the Cook Islands. It is provided that War Loan Cerhcates may be acquired on the time payment system—by monthly instalments for a period not exceeding IB months. State and private employers may, with, the consent of employees, deduct from wages tie purchase money for War Loan Certificates. . The Minister of Finance -is to be empowered to raise up to £1,850,000 for public works, including tho employment of discharged soldiers, the rate of interest nof to exceed i\ per cent. ... The increase in pensions is to be operative from July 1 last till 12 months after the termination of the war. Small Shareholders. Explaining the provisions of the Bill in tfhe House at Representatives last night, Sir Joseph Ward said that the promised relief was being given to small shareholders in companies. A shareholder in receipt of an/incoine l* less than AJUU from all sources would get a refund of' income tax paid in respect io 'any company shares held by him. He thought that would be regarded as a fair arrangoment. No person, with a small income derived partly from an investment in a large company would have his dividend decreased by the payment of income tax. The Beer Duties. Deferring to the new beer duties and regulations, the Minister. said* that the proposals, were intended to servo a definite purpose. Ho had tho full authority of tho Prime Minister for saying that if any attempt" were made to tack licensing legislation on to this portion ot the Bill, the Government would asfe the House to striio it out. Amusement Tax. The amusement tas would apply to snort and amusement of all kind, including races. The Government had lookeu into the question very closely, and had deoided not to place any tax on tickets not exceeding sixpence m price. It was difficult to estimate confidently, the yield. of the tax. Similar taxes had'not given the results anticipated in Britain and Australia. He believed that the taxation "of the low-priced tickets would have closed some of tho theatres, and would have interfered with the amusement ot many people who were carrying great burdens of anxiety and sorrow at tho present time. , Protecting the Banks. The provision mado for enabling banks to hold Government scrip as security against their note issuo was necessary in order to assist tho tanks in making contributions to the loan without reducing tho facilities given to their customers._ A further provision in the same direction was the extension of tho time wjthin which notes would be legal tender to five Tears after the close of the war. Tho Government had to strengthen the iinance of the country hy all the means available, in view of tho demands now being mado for monoy and the demands .that would have to bo made later. ,