TAXATION

Hokitika Guardian, 26 July 1932, Page 3

TAXATION

BANKS LARGE PAYMENTS 1 . WELLINGTON, July 22. Brief mention of the taxation imposed on banking institutions by way of showing that they are beariiig a considjrable portion of the burdens, imposed on the Dominion by th© depression was made by Mr J/ T. Grose, chairman of the Associated'‘Banks, in an address before the Wad'estown Business Men’s Literary and" "L'ebat ng Society.

Referring to income taxation Air Grose pointed out that it is ,an almost invariable rule- that it bears a doiin:fe relationship to incomes actually received by the taxpayer. Su h was th': experience of individuals and also of-ta-ading companies, etc. It was right that that should be so, otherwise tble principle of equitable taxation would be altogether ignoiled Bank's, hoi'ever, wede an exception to this rule. They were .not taxed on the actual profits- made biu-t for purposes of taxing bank incomes it was assumed' that their nlete profits represented l-' : per cent, of tlieir total average assets and liabilities, and on this assumed income they paid the maximum rate o-f tia.x. In .-fealn years, .when profits shrank, they still paid at this rate. If'through adverse trading conditions profits were to dwindle away alt - g;ther still the tax would be assessed on tine assumed income. ' Aforeover/du periods of deore'sion it was inevitable that the problem of bad. debts became more pronounced than in years' ofplenty, but not at any time were the; banks permitted to' deduct from 'tlieir assumed ’taxable' income the amount of the debt's that had' been actually written off as url-eeoverable. “Tin's is mentioned,” said Air Gfbse. “to indicate that the art ’ in' fact bearing in this respect, as they do in other- respects also, a considerable Portion of the burdens imposed 01V New Zealand by the depression. As a matter of fact ini spite of tlie reduced profits of which there is general evidence the banks altogether nay the Taxation Department over £1,000,000 annually. That is in income, note, ail'd other taxation.”