COMPULSORY WAR LOAN

Southland Times, Issue 24239, 24 September 1940, Page 6

COMPULSORY WAR LOAN

Plan May Be Similar To Previous One DETAILS TO BE STATED THIS WEEK It is reported from Christchurch that the compulsory war loan, details of which are to be announced this week, will probably be similar to the levy introduced during the last war in which contributions were based on income lax payments. A clause in the Finance Act, 1917, declared it to be the duty of every person in receipt of an income of £7OO a year or more to contribute to the loan authorized by the War Purposes Loan Act, 1917, an amount equal to three times the aggregate land and income tax for which he was liable under the Finance Act, 1916. If the Commissioner of Taxes was satisfied any such person had not contributed to the extent "required, he was authorized to send a notice demanding that the obligation should be met. Provision was made for appeal. Failure to comply with the commissioner’s demand made the defaulter liable to a penal tax to double the amount of land and income tax to which he was liable under the Finance Act, 1916. DISCRETION ALLOWED

In 1918 the compulsory powers were amended, the limit of income to £7OO a year or over being replaced by the provision that “if the Commissioner of Taxes had reason to believe that any person (including a company or other body corporate) had not subscribed in due proportion to his means” to the war loans of that year, he might, by direction of the Minister of Finance, notify any such person to meet his obligation. In the case of the first war loan the maximum contribution that could be demanded was an amount equal to six times the yearly average of land and income tax paid for the three years ended March 31, 1918. In the second loan, the amount was three times the same yearly average. A penal tax similar to that prescribed in 1917 was added, but payment of it did not remove the obligation to contribute the sum specified by the Commissioner of Taxes, which could be sued for as a debt due to the Crown. Interest on money lent under compulsion was limited to 3 per cent.