WAR LOANS.

Manawatu Herald, Volume XL, Issue 1909, 30 November 1918, Page 3

WAR LOANS.

FREE OF INCOME TAX

EXEMPTION APPROVED

The most-discussed section of the Finance Act in the House of Representatives last night was the one which provided for the exemption of income tax in respect to war loans. Air Veitch (Wanganui) said that a number of members felt that the principle of freedom from income tax, enjoyed by wealthy people who subscribed to the war loan, was wrong. Mr M’Callum (Wairau) said it was a mean, contemptible thing on the part of large money-lenders to vanl exemption. Sir Joseph Ward said “there was no sentiment about (he matter from (he viewpoint of (he ■Government or the lenders." There was an import - aul point in addition lo the explanation in Ihe Budget, if the raising of loans in New Zealand had been made without the exemption of income tax, Hie holders of stockmight have been iu competition on the London market with other countries' slock, Avliich had been raised on the basis of freedom from income tax. This would not have been a, fair position. Moreover, if the same freedom had not been granted here, money could have been invested iu Australia at a rale 2[ per cent, better than the New Zealand conditions. Mr AFCombs (Lyttelton) said (hat only 2] per cent, of the British 'I,OOO million Victory Loan had been raised with freedom from income tax. Moreover, this freedom was different in England and Canada, where it carried exemption from only ordinary income tax, hut not, from special levies. In New Zealand the exemption was complete. Dr. Newman said (hat other countries (including England) which began raising loans free of income lax had later made them subject to taxation, because il was Celt (hat the other system was unfair. The <dause was carried hy 20 to 18. On the'third reading Sir Joseph remarked that it would have been iniquitous to change (lie conditions lor the present loan. The investors in this loan would have been placed at a disadvantage hy comparison with those who took stock in the previous loans on the exemption basis.