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Taranaki Daily News, 19 August 1920, Page 4

RACING CLUBS AND INCOME TAX. There are two points in connection with the action of the Government in calling upon racing clubs to pay income tax that deserve serious attention. The first is the principle on which the demand is made, the secoijd being the injustice of making the tax retrospective over the last five years. The question of whether these clubs are liable t<j pay income tax may or may not be one that should be settled by the Supreme Court, but it would seem to more properly belong to Parliament, which has already imposed other taxes on these clubs in the shape of a levy of two and a. half per cent, on the totalisator receipts, the gross takings and the dividends, besides one per cent, on all stakes. The principle involved by the imposition of income tax is that the earnings taxed are those which benefit the individual or group of units forming a company, In the case of racing clubs there is no division of profits among the. members as in th# case of a trading company, but the earnings are devoted chiefly to improvements for the benefit of the public, though donations are made to deserving public objects, the amount contributed to the War Funds totalling £150,000. iiflder these circumstances it. would seem that unless Parliament distinctly .»uict*.] that these clubs should be liable to pay income tax, merely because they are racing dubs, they should not be subject. to the impost. phe members pay for the privilege of membership, ant! Parliament has specifically taxed the:!: ir, other ways. To make the tax retrospective for five years is not only a high-handed proceeding, but is as unjust A3 it is unwarranted. Those clulis who have already spent the greater part of their income would be severely penalised, and the collection of the tax would virtually be a raid on capital. Tlfey are at least entitled to justice, whatever may be tiie views. of those who would sweep liorse-racing out of existence. No doubt .the Government' is deapsrateljt ia ae«d

of all'tlie money it can raise, but there is a right and a wrong -way in which to meet this need. If the present taxation on racing is not considered sufficient, Parliament ha 3 the power to in\ crease the levy if it so pleases, but to spring a surprise attack on the funds of these clubs savors of methods of Soviet government rather than of British justice. If the intention of the Government with regard to the collection of income tax from the racing clubs is carried out, anxiety will be caused in other directions, for once established principles 'are overthrown, the feeling of security disappears, and the way is opened lip for unscrupulous action.