WELLINGTON NOTES,

Hokitika Guardian, 23 July 1923, Page 1

WELLINGTON NOTES,

EXCESSIVE COMPANY TAXATION. FARMERS PROTEST. [Special To Tue Guardian.] WELLINGTON, July 20 It looks as if the persistent iteration and reiteration of the facts in connection with the operation of the excessive company ueome tax were at last beginning to make some impression upon the Prime Minister and his financial advisers. At the meeting of the New Zealand Council of Agriculture yesterday the following motion was entrusted to Mr W. 1). Hunt, who was chairman of the Taxation Committee set up hy the Government last year, and remains the highest authority in the country on the uicideirc of taxation. "That this conference is of opinion that the present method o! levying income tax on companies is tin just and calls for immediate revision first, because it compels ihe companies to increase charges to cover the tax : second, it restricts the lending operations of the companies in rural development ; and third, it penalises share holders who otherwise would pay litth or u,i income tax. This conference, therefore, urgently requests the Government' to adopt the method in force in other parts of the British Empire, viz,., to charge companies a flat rati on their individual profits only, and to include dividends in the taxable incomes of the receivers.” After Mi Hunt had again explained the position the motion was carried inianimousiy. WHAT INVESTORS ARE DOING. One result of the excessive income tax upon lending companies has been to drive many of them to withdraw their money from mortgages on land and invest it in local hotly dcheiitares, an operation bv which they cs cape two-thirds of the taxation they otherwise would pay. Mr T. AT. Wilford called attention to this matter in the House of Representatives yesterday when the Prime Minister laid on the table a return in regard to insurance societies. The leader of the Opposition asked if l here were any figures in tie return of the Australian Mutual Provident- Society showing the count of money diverted from the ordinary lending channel of freehold securities to local body debentures. Tn tin* hist two years, Mr Wilford went on 111 say, there had been a great change in lending operations. A well known valuer had asked the Australian Mutual Society n little while hack il it had anv valuation work to do and ii hat! replied that it had no niong.w_tn # lend

at ihe present time oil farm securities and would have none while local body debentures wore available for investment. This was a very natural attitude for the Society to take up, as iis duty was to its members and its business to advance their interests; lint it was significant of what was going on in iiic country and of the very serious stale of affairs living created by the retention of an excessive income tax. which was either evaded as in this particular ease, or missed on lo people already over-burdened. MR’.MASSEY PROMISES: LEGISLATION. fu replying to Mr Wilford the Prime Minister went much nearer to admitting that there was something radically wrong with the system of levying the company income tax in this country than he ever had gone Indore. "I have tin information such as is asked for,” he said, "but I have heard that the- Australian Mutual Provident, Society has made up its mind not to lend anv more money on freehold securities in New Zealand. 1 have heard that repeatedly; hut that il is lending to local bodies. I am, however, looking liftin' the oilier side of the question, and in all probability I shall be able to place legislation before the Mouse this se-siini remedying pari at least of tinevil which 1 know is in existence.” This is a very long way in advance of anything Mr Massey previously had said oil the subject, and it i' tn his credit that lace lo face with the fails lie has admitted the defect-; of a system he so long had extolled as ihe best that could lie devised. One call only speculate as to what shape his collteinplnl-

ed legislation will take, but it is not likely, for the present, to go unite so far as Air Hunt and his colleagues on the Council of Agriculture desire.