NEW TAXATION BILL.

Manawatu Herald, Volume XXXVIII, Issue 1572, 4 July 1916, Page 3

NEW TAXATION BILL.

Wo are indebted to Sir Joseph Mard (Finance Minister) for the following outline of the proposals in the Finance Bill, which he kindly telegraphed to us yesterday afternoon ;

The Finance Bill, to be introduced this evening, deals with the ordinary income tax levy iu every year and is, in fact, the annual Taxing Bill with the addition Unit provision is made for a live per cent, lax in respect of all assessible incomes over £3OO. The Bill deals with the assessment of excess profits duty (at the rate of 45 per cent.- of the excess prolits). Provision is made for the method of ascertaining the excess profits. This is by comparison with what is known as the standard income, which is either the average income of the three years up to 31st March, 1014, or the average of any two of them, or the income of any one of them. Failing any of these three methods, the excess profits arc to he ascertained by taking the excess of the taxpayers’ income for the year ended 31st March, 1016, over six per cent, of the capital invested in the business, with a. fair remuneration for bis personal exertions, not exceeding £SOO.

Provision is made for the method of ascertaining' the capital and for adjustments to meet the fluctuation in the capital of the business. Special provision is made for cases where taxpayers are occupying land, for which they pay rent, in the production of their income, and where there are anomalies arising out of the valuation of the leasehold interest, or the amount of rent paid. Special provision is made for consideration of losses during the three years prior to the year in which the income assessed is earned. Provision is also made restricting the writing-down of stock-in-trade beyond the average writing down of the years prior to March 31st, 1914. A special method of assessing the income of banks is provided.

Any increase in the rate of interest, or any increase in rent over and above such amount us would secure the taxpayer a return of (J per cent, on any additional capital expended on his property would bo treated as excess profits.

Provision is made that Avliero the payment of the excess profits duty in one sum would cause hardship an extension of the time for payment may he given, but the Commissioner is to make a report to Parliament of bis action in any ease in which he extends the time for payment, with his reasons for doing so, without disclosing the name of the taxpayer. Salaries and wages are excluded from, the assessment of the .Excess Profits Duty. The Bill gives the Minister for Finance authority for raising the twelve million loan. This money or any portion of it may he raised on (lie security of Treasury bills, or may be raised by the Minister tor Finance by agreement with the Treasury of the Imperial Government without formal security or on such security as may he agreed on. All moneys raised under this ccclioti arc to he placed to the credit of the War Expenses Account established under the Public .Revenues Amendment Act of 1914. Power is given for (he renewal of Treasury hills from time to time by endorsement by (be Minister for Finance or the High Commissioner. A (danse is inserted to enable the Minister for Finance to raise money or renew loans at rates of interest in excess of those stipulated in the authorising Act. This is made retrospective, the reason being that, owing to the conversion .proposals brought down from lime to time by the Imperial Government, (be Minister is never quite certain as to the rate of interest which New Zealand is actually paying for money which has been borrowed. The rates may at any time fluctuate and may exceed the limits provided in the authorising Act. The Bill deals with banking and loans. If the Governor-in-Council may from time to time make certain regulations .... altering the amount of the reserve of coin, bullion, and public securities provided to lie held in New Zealand by any bank, . . . and providing that

bank notes of the domination of 10s may he lawfully issued. The Governor-in-Council is given power to make regulations regulating the rates of interest that may be paid on moneys invested in New Zealand by way of fixed deposit or by mortgage.