THE FINANCE BILL
The main features, of the Government's taxation proposals as Eet fotth in the Financo Bill, circulated last evening, are- already familiar to the public. The- minimum tax on incomes is Is., and the maximum, which is reached by progressive stages at £6400, is 7s. 6cl. in tho £. The land tax has a minimum of lid. and a- maximum of 10kl. But when tho details como to bo considered it will be found that there is a good deal in the Financo Bill that is new, and the greater part of these new features is designed to strengthen tho meshes of the net in which tho taxpayer is to be caught. Quite a number of clauses are included with tho object evidently of minimising the risks of evasion of tho higher scales of taxation; and a new feature- is an absentee land. tax. An absentee is defined as one who has not been personally present in New Zealand for at least one-half the period of four years immediately preceding the year of assessment, and every such absentee is called on to pay a 50 per cent, higher scale of land tax than ho would be called on to pay if he resided in the Dominion. This penal clause extends oven to his individual share in tho land held by any I'ompany in Now Zealand of whjch he may be a shareholder. Companies will not como under the absentee tax. - The injustice to company shareholders who have been each taxed on their individual holdings in a company as though the' income each derived therefrom were equal to the total profits of the company is only slightly lessened by the provision included, in the Bill. Those- shareholders whose total individual incomes do- not exceed £300 a year will have tho taxation refunded, but there are hundreds of. peoplo of moderate means in the Dominion who will still be called on to pay taxation at tho rate of 7s. 6d. in the £ on that portion of their income which they have been accustomed to draw in dividends on their investments' in public companies. The promised concessions under the land tax to meet cases where hardship is likely to bo suffeyed are reasonable enough. In certain cases exemption is to be granted by deducting mortgages from tho valuo of the land. This is to apply where tho total unimproved value does not exceed £3000, in .which case mortgages amounting up to £1500 may be deducted from tho taxablo valuo. Where tho unimproved value exceeds £3000 the exemption of £1500 is diminished at the rate- of three pounds for every four of that excess, thus extinguishing tho concession when the unimproved value of tho land reaches £5000. This provision for tho exemption of mortgages is restricted to mortgages in existence on March 31 preceding tho year of assessment. While this proviso may bo reasonable enough so far as it applies to tho future, it would bo more equitable to fix a later date for tho purposes of the current year's taxation, say, mortgages in existence on July it I of this year. There is also a special exemption from tho payment oi land tax, subject, to tho Commis-
sioner's approval, where the total incoino of tho owner of tho land docs not exceed £200; and a further concession is made in the cases of widows with children dependent on them. These concessions aro all designed to relievo people of comparatively small means or so situated as to bo unable to pay tho high rate of taxation now imposed without suffering special hardship. Tho penal clause of 'tho Bill to compel those _ with incomes over £700 to subscribe to the War Loan is fully explained in our news columns. Those who did not subBcribo to tho 1916 War Loan are sent loan to the extent of one and a half times the amount of their land and income tax (exclusive of excess profits tax) for which they wero liablo under tho Finance Act of 1016. In addition, they are called on to subscribo to this year's loan three times tho amount of tho land and income tax stated. That is to say, a person who paid income tax last financial year amounting to £50 and who has not subscribed to either last year's or this year's loan will bo expected to now subscribe to tho extent of £225, failing which he may. bo called on to pay as taxation doublo tho amount which ho paid in land and incomo tax, which would' mean in tho case quoted £100. It 'is very necessary that there should bo safeguards provided in tho case of this penal clause, and power of appeal to the Commissioner is given. Companies making profits insufficient even to enablo them, to pay dividends to thoir shareholders, and in a weak position financially, jinay still be taxpayers and quite unable to subscribe to the loan. Yet apparently they are liablo to be called on to do so. Generally speaking, however, the provision will be approved both as a means of bringing home to the thoughtless a proper sense of their responsibilities and also as a method of reaching the pockets of tho financial shirker. Tho promised additions to old-age and other pensions are provided for, but there is no supplementary amount for the pensions of retired school teachers and Civil Servants. The loweri pensioned school teachers and Civil Servants are quite as much entitled to consideration at the hands of the Government as' other pensioners, and it may bo hoped that the Finance Ministek will see his way to enlarge His Bill in this direction. It is impossible ;to pass judgment on the details of the Finance Bill without very close examination of its provisions. Members will indeed bo well advised to examine the details very carefully. _ With the broad proposals they will find little to which they can take exception. They impose heavy burdens of taxation, they conscript wealth in a variety of waye, but the money is needed, and in most cases it is being taken from those who are able and willing to pay.
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Dominion, Volume 10, Issue 3176, 29 August 1917, Page 4
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1,024THE FINANCE BILL Dominion, Volume 10, Issue 3176, 29 August 1917, Page 4
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