EXCESS PROFITS.

Lyttelton Times, Volume CXVII, Issue 17280, 22 September 1916, Page 4

EXCESS PROFITS.

The Commissioner of Taxes is not- responsible for tho legislation under which his Department operates,, and we suppose ho would not care to be in'regard to some of its vagaries. His courteous reply to our representative s question as to what notions guided Parliament on one of the details of the excess profits taxation -throws probably as much light on the subject as could ho expected.. Of the four choices allowed to. a taxpayer as to the basis of assessing his standard,or “-pre-war income, fop tho* purpose of calculating fl excess profits,” if any, it seemsito us timj) two are of no account, and that, in fact, they merely cumber tho, statute. The “standard” income when arrived at is, of course, deducted from that of the “income year in this case the year ended last March — in order to arrive at the amount subject to the excess profit tax of 5 per cent. The taxpayer may. assess the “standard” on tho average income of three years, on the average of any two of or on the income of any one of them. Obviously, unless the individual is ver£ foolish or, unusually generctas, ho will take the highest incomo of tho three years us His standard, since no amount of aver-

aging could give him such a favourable result. Tho Commissioner thinks 'that tho wide range of choice was given “ principally to lend additional flavour of compulsion to tho choice of a basis.” If that, means, as we take it,, that the framers wished to give the statute a specially formidable appearance, they certainly have succeeded; in a sense, but we doubt if,a sirnplo form would have been loss dignified. The Commissioner is making-' an exceedingly usolvi 1 tour of the country to explain the requirements of this new legisla-' tion, and its complicated nature has, rendered this very necessary; but Parliament does appear to have made a quite unnecessary addition to the difficulties of all concerned by arranging throot alternative courses, one of which makes ,the other two superfluous. At tho same time, 'tho complication may lead ft few unwary taxpayers into a larger contribution to the l'evenue than keener men are going to make. That may be all right for. the Treasury, .But it involves individual injustice which would have been obviated,. by simpler statutory provisions.