The Times SATURDAY, JANUARY 23, 1937. Taxation Revision

Manawatu Times, Volume 62, Issue 19, 23 January 1937, Page 4

The Times SATURDAY, JANUARY 23, 1937. Taxation Revision

The Prime Minister's announcement that there is to be a complete revision of land and income tax legislation is indeed welcome. The people of this country are bearing the highest per capita burden of taxation to be found anywhere in the world. A burden is felt by its bearer in tw'o ways. The sheer weight has first notice; then, too, the manner in which it is placed upon the bearer’s shoulders is of great importance. The care with which a skilful tramper places his packs, illustrates this latter point. So, too, does his elimination of unnecessary weight illustrate the first. In his pre-election addresses, the Prime Minister made clear his opinion that the rate .of taxation in New Zealand eras up to the limit and that there must be no increase. When the Budget was brought down the jrublic were astonished to find that taxation had been substantially increased. To carry out the Government’s programme such increases as were made were then inevitable. With a rising level of export prices the income of the Dominion should now be greatly increased and a reduced rate of taxes next year should yield the same income to the Treasury. There should thus be some hope for the overburdened taxpayer that his load may be lightened. * The incidence of taxation is now of almost as great importance as its sheer weight. As the Prime Minister remarked, the last consolidation of taxation legislation was made as long ago as 1923. It is thus fourteen years since an overhaul was carried out. He recognised that many anomalies existed and should be removed, and stated that the Government would welcome representations from interested bodies and individuals to help the special committee working on this revision. This statement is encouraging, and businessmen, farmers and others interested would be well advised to prepare and forward recommendations. From out of their practical experience they would be able to forward much information to clarify the problems. We would suggest, too, that interested people in the provincial districts and cities should act for themselves. It frequently happens that recommendations upon State matters tend to come from the four centres only. Direct representations from the provinces so called are to be desired. The two outstanding problems are company taxation and the land tax. There are others, too, perhaps the chief of which is the sales tax. The prime defect of the land tax is the crudeness of its application. No regard is paid to the class of land to which it is applied. In its present application grave injustices are done to many property-holders, both town and country and to thousands of small shareholders in large companies which hold city property for their active use. This has been so for almost twenty years past. High income tax applied to companies is one of the worst features of New Zealand taxation. The evil is long dated—fully twenty years old. Expert opinion considers that our company taxation has reduced the Dominion’s rate of development. A company should not bear taxation itself, but shareholders should be taxed on their dividends as individual taxpayers. Many grave anomalies arise from neglect of this principle. The field for taxation revision is wide and wise revision would confer great benefit upon the Dominion. Constructive suggestions, backed by practical knowledge and actual illustrations, 1 would be invaluable towards framing better legislation. The next Budget should contain much of interest and perhaps a considerable measure of balm to taxpayers in general.