THE NOTE TAX

Hokitika Guardian, 26 September 1930, Page 2

THE NOTE TAX

REPLY TO STATEMENTS IN THE HOUSE.

WELLINGTON, Sept. 24

Sir Henry Buckleton, general manager of the Bank of New Zealand, has sent the following letter to the Act-ing-Minister of Finance concerning the bank’s attitude towards the increase in note tax:—

“In view of statements made bv some members regarding the attitude of the ibankp in not themselves shouldering to the full the increase in note tax, may I, by way of correction, point out:— “(1) That the banks are, for income tax purposes, already inequitably taxed on an unscientific, arbitrary basis imposed on no other company, which assumes a fixed profit even though its business might, be actually run at a loss. Under this inequitable system this bank alone will pay this year i£53,841 over and above the assessment if made in the ordinary way were it merely a limited compony. “(2) That the bank has no intention of passing on the increase of 10 per cent in income tax, to which all taxpayers are equally subjected, no twithstanding the untenable basis of the taxation previously referred to. This 1.0 per cent increase amounts to £17.865. '

“(,3) That the increased note tax dates from July 1 last, while the charge for keeping account dates from Octolier 1 next, The increased tax for this period, which represents to the bank £13,500, is not being passed on, “(4) That we estimate this bnnk’ft increase in note tax will w>t he less than £54,000 per annum, whereas the number o c accounts of the nublie kept by us liable to the increased charge is under 85,000, representing at 10s £42,500. ■ “05) That as this hank is probably doing half the banking/ business of the Dominion, it can reasonably be assumed that the total number of accounts assessable (by the combined banks is approximately 170,000, and not the wild conjecture if one member 400,000.

“May I further state that rather less than one half of this hank’s pro-* fits last year were earned inside the Dominion, and of the New Zealandearned profit £152,602 was not taxable. being interest on our holdings of ‘tax free’ 4£ ; per cent war bonds. The sum of £33,950 was also exempt from taxation, being the bank’s contribution to the officers’ pension fund and to widows. M . “To clarify the position, may I ask you to be good enough to take the earliest opportunity of submitting to the House ‘the facts as herein set out, and should honourable members fcare to question me on the subject generally, I am at their service.”