INCOME-TAX.

Hokitika Guardian, 3 February 1926, Page 1

INCOME-TAX.

GAS COMPANY AND POWER BOARD. AUCKLAND, Feb. 1. “Fueltided in the taxes is ail item of £24,372 for income-tax, ami it is this which merits your serious attention,” said the chairman (Air J. 11. Upton) to to-day’s annual meeting of the Auckland Gas Company. “Incometax charge, necessary as it is, involves us iir a gross injustice, owing to circumstances which T will relate.

“We are purveyors of light, heat, and power, as you are aware, we have a keen competitor in the Electric Power Board, who also arc purveyors of light, beat, and power, hut while i his company pays income-tax of £21.372, tiie Power Board is exempted. All economists uphold the maxim that every industry should hear the cost of its administration, and if it cannot, if is being conducted at a loss, 'faxes are a necessary part of the cost of administration. The Power Boards pays no taxes, and therefore, pro ianto. their business is conducted at a loss. Who pays that loss? None other than that overburdened victim, the general public, of which gas manufacturers form a part and gas consumers a very large part. Both services supply precisely the same commodities. r I he one is taxed to the tune of £24,872 a year, equivalent to (id per ICAO cubic feet, of "as sold - the other is exempted. DUTY FREE.

“But that is not all; lx’tli the Power Board and ourselves require to import large quantities of manufactured material. bid the Customs duties ate :,(> arranged that while the greater part of our importations of such material are dutiable, those of the Power Board arc almost wholly free. It. seems incrediable, hut, unhappily it: is true. The question may ho asked. How can von assess for income it, concern that does not show a profit? The answer is very simple. A company is taxed on its profits. That is substantinlly its dividend. A Government or municipal concern lots no shareholders’ capital. hut is carried on on borrowed capital. The interest it pays on such capital is the equivalent of the shareholders’ dividend and should he taxed acordingl.v. The Power Board has borrowed £1,722.300. -The interest on

that, sum at 3.1 per cent, is £04,80.. on which income-tax ought to he paid. The amount would he about £21,813. But even that is not all. They add insult to injury, for when they borrow money your property is pledged as security for its repayment. They tire now proposing to borrow a further £030.00!) for which, of course. your nropertv is pledged. ALL CAPITALISTS. “But again it is said that gas shareholders are. after all, only a lot of capitalists. Now that is quite true. 1 will tell you what sort of a party they are. The first and largest is the group of employees, who hold upwards ol 20,000 shares acquired entirely through the operation of their own Provident Association. Shareholders whose year!v dividends are Over £3OO 20 Under C3OO and over £2OO ... 20 Under £2OO and over £IOO ... 122 Under £IOO and over £3O ... 282 Under £3O and over £2O ... ->lB Under £2O ami over £lO ... ‘ 44!) Under £lO and over Cl ... ... oil!) Total shareholders ... ... 2002 ••or this number 1300 received dividends of less than £l per week. We are 2002 in number, hut while all certainly arc capitalists, it would not appear to hi* correct to describe us as Ihe ‘idle rich.’ I may mention, broadly speaking, that, if our sjiarelmlders were taxed individually the lax paid would have been £1234 instead of £24.372. but that involves a serious question that doe-, not intimately concern us to-day.”