The Dominion MONDAY, APRIL 22, 1918. COMPULSORY LOAN CONDITIONS

Dominion, Volume 11, Issue 182, 22 April 1918, Page 4

The Dominion MONDAY, APRIL 22, 1918. COMPULSORY LOAN CONDITIONS

A great many people appear to bo in a state of uncertainty regarding their liability under the clauses of the Finance Act providing for compulsory contributions to the Wan Loan. ' Correspondents continue to question us as to the meaning and effect of statements made by the Finance Minister or of sub-sections' of the Act itself, and it must be confessed that it is difficult to answer some of the questions raised with any degree of confidence. In speaking somewhat vaguely as he has done on some points, Sib Joseph Ward has certainly served one good purpose/and that is to secure the widest possible publicity for the compulsory scheme. It is being discussed in all directions and from various points of view, and a wide diversity of opinion is evidenced. For instance, the .Act provides that an income tax ■payer may be called on to contribute six times the average annual amount of the land and income tax assessed to him for the years 1915-16, 191617, and 1917-18. One of tho points in doubt regarding this provision is whether "income tax" ' includes the "special war tax" based on the income tax. In tho Finance Acts of 1917 and 1918 tho "income tax" and tho "special war tax" are treated as two separate taxes, though both arc based on tho income of the taxpayer. In the 1917 Act (Clause 40, providing for, compulsory contributions to war loans) tho amount paid by way of income tax in the form of excess profite was specially exempted in computing income tax as a basis of compulsory contribution to war loans, but this clause was repealed by the Act of last session,, and no reference to the excess profits tax or tho special war tax now appears in relation to compulsory war loan contributions. It is. desirable, therefore, that tho Minister of Finance should clear away the doubt which exists as to the interpretation the Taxing Department will now place on the term "income tax." Another question which has caused a good deal of concern is the uncertainty as to tho position of contributors to previous war loans. Apparently it does not matter how much a man may have contributed to previous war loans; if ho haa not contributed to _ the current loan he still remains liable to be called on by the Department under tho compulsory clause. This is strongly resented by somo largo contributors to earlier loans, who feel that they should not be mado liable to pressure of this nature, which brackets them with financial shirkers. Tho fact that tho Commissioner of Taxes is instructed to tako into account, boforo issuing notices calling for compulsory contributions, the amount of all contributions to previous war loans should minimise the possibility of annoyance or injustice of this nature, but it may be hoped that in giving effect to the compulsory provisions of the Act the cnergios of the Department will be first directed to bringing to book the obvious shirkers. No substantial contributors to previous loans should be troubled by the Department until it has thoroughly cleared up the cases of those who havo plainly failed in their duty. Tho fact

should not be Inst sight of that further loans will have to be raised in the near future, and the injudicious handling of the compulsory powers conferred on the Department may arouse a spirit of antagonism which may prove harmful later on. That the compulsory provisions are necessary is clearly proved by the announcement made by the Finance Minister last week regarding the subscription to tho £9,500,000 loan. The amount subscribed fell short by one million pounds of the total required, and this million must be secured. Those who have failed to do their duty must be compelled to meet their obligation to the State. This, however, does not relieve those, in authority of their obligation 'to give effect to the law with as little inconvenience as possible, and a first step in this direction is to leave no room for doubt as to exactly what the law means and as to the order of procedure to bo adopted in enforcing it. Sir Joseph Ward has given a good deal of information concerning the compulsory provisions of the Finance Act, but it is desirable that he should take an early opportunity to clear up a number of points which still remain in doubt and which by reason of this uncertainty are causing a good d.;al of concern to all classes of taxpayers.