TAXATION BILL.

Hokitika Guardian, 31 July 1923, Page 4

TAXATION BILL.

PENALTY RATES REVISED. WELLINGTON, July 20. The most important feature of the Land and Income Tax Mill, introduced in the House of Representatives by Governor-General's message, is the restoration of the former exemption from income tax of income derived from the direct use and cultivation of the land. As it was described by the Prime .Minister, "instead of people having to pay land tax and the income tax, they will pay land tax and land tax only.”

The measure, which is of 177 clauses, is of a consolidating character, with a few important amendments. The change in regard to tin* taxation ol fanners ito he achieved by including in the list of exemptions from income tax the following: “Income derived by any owner of land in respect of the rent thereof, or the profits derived from the cultivation or direct use thereof, savo that this exemption shall not apply with respect to any profits or gains referred to in paragraphs (dl and <e) of the next succeeding sect ion.” The paragraphs referred to as defining income nut exempt are as follows:—“(d) All profits or gains derived from the extraction, removal or sale of minerals, timber or flax, whether bv the owner of the land or any other person, provided that in the ease of profits or gains derived as aforesaid from the removal or sale of timber or coal a deduction shall he allowed erpial to the cost of the timber or coal removed or sold by the taxpayei during the income year. ,o) All profits or gains derived from the business nl dealing in live stock, meat, butter, cheese or wool, or ill grain, fruit, flax it other crops, being the natural products ol the land, carried on by any person other than the owner of that land, provided that when the taxpayei is the owner of other land, which being used for the purpose of the sa.iu business is not in itself .sufficient lot tile lllil sustenance Ol such live stuck or production of such other products, then lhe < 'oiiimissioiier shall assess foi income tax oni.v the profits derived irom dealing in so much of the above

named live stock or products as is in excess of the eapaeify of the said land to fully .sustain or produce.” HANKING COMPANIES' INIO.ME.

The special provisions relating to the income of hanking companies have been altered to restore in its entirety the former laws as to the mode of computing the taxable income of the companies. Luder recent legislation income derived by bunking companiesfrom debentures was separately assessed. and debentures held by a hank I were excluded ■ for the purpose of income tax? in tin* compulation of its .assets am! liabilities. This alteiatior of iln law inis led to certain anomalies as between severe! hanks rarrying on hti-ines, in New Zealand, and it is accordingly considered advisable to restore the former law. PREMIER D ESC'll 1 RES THE CHANGES. I he Prime Minister explained to the House, on ilie introduction of the ll.ill. that it was mostly a consolidation measure., lut that ii had three new provisions. One was in regard to laud tax. which was being put back to the position it held before the war. Instead of people paying land tax and income tax, they would pay land lax and land fax alone. The second change related to the method of assessing income tax paid by hanking companies in New Zealand. It was really to get rid of an anomaly which would make very little dillerem-e to the collection of the tax, lint it removed a source of irritation to what he might term “toroign" I-anks doing business in the Dominion. Tim third alteration reintroduced a tin I rate el penalty for overdue tax. Two ot three years ago there was an alteration ill land tax and income tax penalties, three scales ranging from ."> to 10 per cent being chargeable. This was found io work badly and to inflict a great deal of liard.-dup. because if i man I tolled H impossible to pay Ins taxation it was not, making matters easier for the taxpayer or for the country if lie had to pay Hi per cent penalty. I herolore a flat rate of 7i per cent was being adopted, and lie was assured by t in* head of the Taxing Departm.-iii that it Would be more satisfactory.

The Rill was read a second time pro fnima. so that ii could he rol'err.-fl in the Public Accounts Committee.