UNTAXED RIVALS

Evening Post, Volume CXV, Issue 33, 9 February 1933, Page 14

UNTAXED RIVALS

REDEEMED CAPITAL

HIGHER TAX WIDENS GAP

•-'. "Evehing Post," 9th February. : The" Wellington Gas Company held' its annual' meeting of shareholders on Tuesday, and the Auckland- Gas - Company held its annual' meeting <on.Monday. The burden of taxation, and the competition of untaxed publicly-owned competitors, were referred to by both the' chairmen, Sir. Harold Beauehamp and Sir George Elliot. '- ■....''.' It was stated that the Wellington Gas Company provides this year, for rates and taxes, including income tax, no less than ,£27,952,, which is £1420 gi-eater than the dividends paid to shareholders. In income tax, in 1932, the Auckland . Gas Company, paid £30,433, as compared with £25,001 in 1931 and £16,149 ,in 1930, "Thus, in the short space of two years, while profits have been practically the same, income_ tax has increased by '£14,284; and at present the- Government is receiving: an annual sum, from this company; equalling 49 per- cent, of,"_ the dividends -paid to shareholders." •■"'■ Sir Harold Beauehamp stated that the Government, although greatly in need of revenue, still hesitated to place municipalities and power boards supplying gas and electricity upon the same footing, regarding taxation as companies. Sir George Elliot said to the Auckland shareholders: "For some unexplained reason everyone is not taxed alike; municipal, Government concerns, and co-opera-tive companies are still exempt, notwithstanding widespread representations, resolutions ;by chambers of commerce, and reports by Boyal Commissioners. . ; . As you are aware, a great number of these non-income tax paying concerns are accumulating large sinking funds but of profits, and in the fullness of time they will be in a position to pay off their loans and debentures. When that.time arrives'what is going to happen to their tax-paying competitors? We have before us. an apt illustration. If * this company, instead of paying £30,000 annually to the tax collector, paid that sum on account of the reduction of share or debenture capital, in the fullness of time that liability would be completely wiped out. If such a state of affairs came about, and the company got into the happy position of having no interest charges to meet, and assuming good management, no company paying the existing taxation could possibly compete with it. .. . This is exactly what is taking place with most of'-'thie Governmental, municipal, and cooperative trading organisations. Instead of bearing their fair share of taxation they are accumulating, .for the ultimate extinction of their indebtedness to- the foreign moneylender, the contributions they should be making toward taxation. As this becomes an accomplished fact great' numbers of, private traders who are now bearing excessive taxation loads will be-fofce.il out of business. . ; . - The burden of taxation such as this .company is now ■_ carrying has become excessive, and it is a question whether the time haa not arrived-when some scheme for a reduction of capital in exchange, for: an issue, of debentures should be considered, and,; if possible,-adopted." , to Sir Harold Beauehampfigures, the WelUngton Gas Company's taxes in 1932 amounted' to 13.4 per cent. cf the- total revenue from gas sales, being equal to 10.7 d per thousand cubic feet 'i the gas sold. .'■■•.