THE NEW TAXATION

Hokitika Guardian, 31 August 1929, Page 7

THE NEW TAXATION

OFFICIALLY EXPLAINED

WELLINGTON, August 27

A memorandum from the Commissioner of Taxes was prepared for the purpose of indicating the exact nature of the new land tax proposals and tlieir effect on the taxpayers. The general outline was given by the Prime Minister in his speech in reply to that of the Leader of the Opposition, when 'the no-confidence amendment was under discussion, and it gives the position so clearly that it is worth quoting in full. The Commissioner of Taxes (Mr E. J. R. Gumming) states: “With reference to the taxation proposals contained in the Budget, I have to state that there are approximately 80,000 farmers in the Dominion, of whom only about 26,000 pay either land tax or income tax.

“The only proposal of the Budget which will add to the number of farmers paying tax is the reduction iit the mortgage exemption. This will increase the number of farmers paying land tax by about 550. It will increase the land tax payable by a further 1050 farmers. 'The reduction in the mortgage exemption will not affect any farmer whose land is of' an unimproved value less than £SOOO and as shown above it only affects about 2200 farmers, and most of them to a comparatively light extent. It is absurd, therefore, to suggest that a huge burden will be placed upon the farmers of the Dominion.

“It should be noted that the existence of mortgages does not necessarily indicate indebtedness in all directions. The mortgagor may hold mortgages or (other income earning assess of a considerable amount. Many taxpayers by mistake did not for years after 1924, when the mortgage exemption was increased to £IO,OOO, claim the mortgage exemption, and paid land tax on the full unimproved value of their land. This indicated that although mortgages existed the owners wqre quite able to pay. They were greatly surprised subsequently to learn that no contribution or only a small contribution to the' revenue was inquired from them. It should be clear that the mortgage exemption has been on too liberal a scale.

SUPER TAX OX FARMING LANDS. i

.“This will not affect any farmer whose land is of an unimproved value loss than £12,500. Small farmers will not, therefore, he affected. Out of the 80,000 farmers in the Dominion only about 1759 own land of an unimproved value in excess of £12,509. It is clear, therefore, that only large holdings will be liable to the super tax. The revenue anticipated from this source is about £325,000. INCOME TAX ON FARMERS.

“Returns of income will 'be required only from farmers owning or leasing land of an unimproved value of £12,500 or over. As it is proposed to allow a deduction of the land tax. and the super tax payable from -the income tax payable it is surprising that any objection should be raised to the proposal. Any additional revenue will represent the amount by which the land tax and super tax falls short of the taxation at present imposed on other classes of the community on their income. It is not anticipated that any excess will b e disclosed, except in the case of the very large holdings. If an excess exists it^ should be collected in fairness to other taxpayers.”