TAX COMMISSION REPORT

Hokitika Guardian, 18 July 1924, Page 2

TAX COMMISSION REPORT

[UT TELEGRAPH —PER TRESS ASSOCIATION.!

WELLINGTON. July 17. The Taxation Commission's report was tabled in the House to-night. H makes the following recommendations :

That legislation he passed instructing and empowering the Comim. sioner of Taxes, when obtaining future incomes tax returns to compel an individual to include in his income the whole of his income trom all sources, specifying the amount from each source separately.

When data asked for under the above is obtained and compiled, (which will he towards the end of l!)2o), the question of whether or not a complete change can be made from the present system of taxing companies direct as individuals to a system of taxing every individual upon his total income mnn all sources (excepting «uly tax-free war loans) should he carefully considered. If a complete change is found difficult or impracticable then a I loginning should he made by taxing individuals in respect of dividends received by them from companies, and supplementing the revenue obtained in this way bv a moderate ilat rate on all profits of nimpanies.

That the maximum rate ol graduated tax should be first lixed nt n level that will not cause an outflow of capital from New Zealand. It would be advantageous to fix a rate which would cause an inflow of capital. 'I liis rate nui'-t lie adjusted from year to year, including to the financial requirements and circumstances, Isitli within and without New ’/.calami. The graduation downwards should ho on a scale that will enable the required sum to he raised; such graduation to lie made in such a way as not to he oppressive on the taxpayer of small means.

The rate upon the undivided profits of cotnpnnie.s should he approximately half the maximum rate.

If it is i ill possible, without undue hardship, to obtain the necessary revenue from tlie sources already mentioned. then the revenue from these sources should lie supplemented by a moderate flat tax on companies, assessed upon their total profits, in addition to tlie tax on their undivided profits.

Companies registered outside Xew Zealand should he taxed on their total inenii.es derived from Xew Zealand, al the rate at whivli the companies registered in Xew Zealand arc assessed on their undivided profits, and should also ho liable in respect of such incomes

for any flat-rate company tax. Oversea shareholders and debenture holders in companies registered in New Zealand should have their tax stopped at the source, at the maximum rate. Companies interested should he doomed to he agents for their oversea shareholders and debenture holders, and should he responsible for the payment of tax. Oversea shareholders and debenture holders -should have tlie right to apply for and obtain a rebate of difference la-tween the maximum rate charged, and a rate that would apply to the whole of their income derived from New Zealand. Xo exemption should he allowed to oversea investors in Xev.* Zealand. The incomes of pastoral tenants should he made subject to tax, and this should he done immediately, so that incomes for the year ending 31st March. 1921. will not he allowed to escape taxation.

The present graduated land tax should he abolished, and an income fix should he paid in respect of income from land its part of the taxpayers’ income. Any loss of revenue brought, about by the adoption ol the last recommendation, should he made up by a flat rate on land tax on till unimproved land values over £2009. with a rate below C2OOH of two-thirds of the rate above £2OOO. The present LMOH and mortgage exemptions should he continued. It is thought that Jd in the £ up _ £2OOO and Id in the £. beyond that amount, will produce the sum at present required. Tn assessing income tax. no exemption should he allowed ill respect iif this land tax*. It is also recommended that relief from land tax* lie given to land devoted to plantations of timlier. trees and areas not exceeding 2-1 acres ot native hush. That a more reasonable allowance for depreciation of tramways. workers’ cottages and other wasting assets, lie allowed ill the ease of sawnifiling and mining ventures.