TAXATION

Southland Times, Issue 18834, 29 May 1920, Page 6

TAXATION

INCIDENCE OF INCOME TAX

Incidence of income tax and taxation generally were referred to at the Wellington Chamber of Commerce meeting last week. The chairman of the Chamber (Mr M. Carr) expressed the hope that there would be some mitigation of the heavy taxation on income and land which has been obtaining for the past four or five years. Whether it is possible for there to be any decrease in the amount of taxation levied seemed to him to be problematical. They must remember that the Public Debt had been practically doubled since 1914. There was not only the obligation for interest on the Public Debt to be met, but increases for expenses in State administration and for pensions of various kinds. There was, however, one matter in which the commercial community was very much interested and which it considered should have attention, viz., incidence of income tax. “I believe,” said Mr Carr, “that a small commission acting with the chief officials of the Income Tax Department could readily bring down within a very' short time proposals which would be acceptable to Government and not involve reduction in the amount.of revenue to be obtained. There is the matter of the taxation of companies, which undoubtedly' requires some alteration, and matters appertaining to the allowance for depreciation. It appears to me that there is no justification for the Department limiting its allowance for depreciation to the small amount which it now does. Not only is the allowance inadequate in many' instances, but it is conducive to bad business practice. Then, again, it shrould be quite immaterial to the Taxation Department whether depreciation actually written off assets or whether it is carried to a Depreciation Reserve Account. “There is the wider question of policy which Is involved in Municipal and State Trading Departments. Those Departments should bo expected to pay income tax in the same way as any other business concern. This would enable such trading operations to appear in their proper perspective, and be an inducement to the management in economical working and administration.”